The crypto industry earns a colossal win as Ukraine legalises the operation of crypto exchanges, with local banks now allowed to open accounts for digital asset companies.
The growing relevance of cryptocurrency has earned it a whitelisting from one more country. Yesterday, Ukraine’s Ministry of Digital transformation announced that President Volodymyr Zelenskyy signed a profile law legalising the crypto sector in the country.
According to the ministry, the new regulation paves the way to develop a legal virtual asset market in Ukraine. Before signing the law, the Ministry of Culture had been responsible for establishing this area’s legal framework. However, with the latest development, the Ministry of Finance is revising Ukraine’s Tax and Civil Codes. This will ensure that the virtual asset market becomes fully operational.
Furthermore, the Ministry said the new law was an essential step toward bringing the cryptocurrency sector out of the shadows. It further revealed that the new law would take effect once Ukraine’s Tax law is amended and signed. The National Securities and Stock Market Commission is expected to oversee the new market.
Ukraine’s New Law Has Been In The Works For A While
The law to legalise the crypto industry in Ukraine had been in the works for a while. Legitimising the sector was already being discussed even before the country’s invasion by Russia, which saw it embrace digital assets fully.
In February, the country’s parliament approved a law legalising cryptocurrency. However, it did not accept Bitcoin or other cryptocurrencies as legal tender like El Salvador. Instead, the bill ensured the protection of businesses from crypto-related fraud and abuse.
Even though the Ukrainian government did not regulate the crypto industry, it had grown organically to become a crypto hub. Chainalysis ranked Ukraine fourth on the global crypto adoption index. This raised the need for the proper regulation of the sector as an estimated $8 billion in cryptocurrency passed through the country annually.
The 2021 Global Crypto Adoption Index Top 20. Source: Chainalysis
Ukraine Set For Further Increase In Trading Volume
The passing of the new law is set to increase the further volume of transactions carried out in hard currencies. Recently, on-chain data provided by Kaiko suggested that strict regional rules have limited trade volumes of these currencies. This has seen an increase in the relevance of fiat-pegged stablecoins, which link fiat and crypto-assets.
However, with cryptocurrency now legalised, the average trade size of transactions that has increased because of the crisis will spike further.
Ukraine continues to be a significant player in the crypto industry, and its new law will further enhance adoption globally. The solidarity of the crypto community to make donations to its war effort in crypto shows that it is highly regarded in the sector.
Hopefully, the legalisation of crypto would spur other countries into action and lead to more regulation. This would precipitate global adoption and finally legitimise crypto’s space in the new financial paradigm.
Do you think more countries should follow Ukraine’s lead and legalise cryptocurrencies? Let us know your thoughts in the comments below.
Chris is a crypto enthusiast and a firm believer in the blockchain’s ability to create a new financial paradigm. Through writing, Chris hopes to expose the intricacies of this disruptive technology and how it is beneficial to Africans and developing countries. He aims to give readers a rational and unbiased outlook of the industry by equipping them with the necessary information to make enlightened investment decisions.
