18 Feb 2022 Jane Whitmoore
The Ukrainian Parliament Legalizes Bitcoin (BTC) And Cryptocurrencies
Ukraine managed to become one of the very few European countries to pass changes to the law on virtual assets and officially recognize Bitcoin and other cryptos as financial tools.
The move by the Ukrainian Parliament comes amid increasing tension between the country and its neighbor Russia, which also had its fair share of political uncertainty about whether or not cryptos in Russia would be banned, as proposed by the Bank of Russia.
Ukraine’s Bitcoin legalization, however, didn’t go smooth either, as in September 2021 Ukrainian President Volodymyr Zelensky vetoed the initial proposal due to a lack of funds in the budget to meet the regulatory oversight requirements of the Bill.
Zelensky’s backfire was also fueled by the National Bank of Ukraine (NBU), which was initially included in the oversight committees, along with the Ministry of Digital Transformation, as well as the National Securities Commission (NSC) and a new independent regulatory body. However, Ukraine’s central bank treated virtual assets as a source of potential risks, including money laundering and the financing of illegal activities. Furthermore, the NBU also saw the use of virtual assets over traditional bank products and fiat currency as another medium of financial instability.
The second vote
After Zelensky’s veto, the original proposal had to be reworked. After the overhaul, the proposal was yet again put for voting with Ukraine’s parliament.
This time, the parliament voted with 272 votes in favor of the new law and only 10 against it.
The new Law On Virtual Assets will allow individuals and businesses to launch a legal market for virtual assets in Ukraine. Furthermore, the National Commission on Securities and Stock Market will regulate the virtual assets market.
"The new law is an additional opportunity for business development in our country. Foreign and Ukrainian crypto companies will be able to operate legally, while Ukrainians will have convenient and secure access to the global market for virtual assets. Market participants will receive legal protection and the opportunity to make decisions based on open consultations with government agencies. There will appear a transparent mechanism for investing in a new asset class," Mykhailo Fedorov, Deputy Prime Minister - Minister of Digital Transformation added.
The law, however, doesn’t make Bitcoin, or any other virtual asset, for that matter, a legal tender in Ukraine. It is rather a regulatory framework to serve as a gateway to becoming “a leading country for business development in this innovative field”.
Why not crypto mining
Shortly after the official statement about the passed law, Ukraine’s official press service announced that the country has sufficient energy reserves, while the sources of supply are diversified.
"There were no rolling blackouts, there are none and there are no plans. We have sufficient reserves of energy resources to complete this heating season in a stable way," Denys Shmyhal, Ukraine’s Prime Minister added.
Despite talking more about fossil fuels and gas deliveries, especially when the country prepares for a war conflict with Russia, Ukrainian crypto miners could not be happier about the electrical stability of Ukraine.
Ukraine did not stop Bitcoin from plummeting
The news about the new crypto law in Ukraine had little to no effect on Bitcoin’s performance in the past 24 hours, as the world’s largest crypto to date fell back below $40,000 to trade around the $39,894.91 mark.
Source: Crypto Browser
The downwards push triggered a chain reaction and almost all of the top-100 cryptos recorded losses anywhere between one and ten percent. NEO is the only currency, marking an increase, with the token exploding 10% on February 18, reaching a monthly high of $27.03 per token.
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