Ukraine is headed towards legalising crypto. As an initial step, the country has already legalised bitcoin as one of the digital assets. This proposal was mooted by Ukrainian president Volodymyr Zelenskyy who imposed a law, making crypto legal in this republic. The legalisation of Bitcoin in Ukraine took place on 17 February,2022. The bill was originally vetoed on October 2021, that’s when a new regulatory body established the viewpoint that the costs of crypto were too steep.
Impact of legalising Bitcoin in Ukraine
The law on cryptos was enacted to allow foreign and Ukrainian crypto exchanges to operate legally in Ukraine. Experts perceive this as an important milestone towards developing the virtual assets market in the country. Further, a regulatory framework will be created for the Ukranian crypto market. Ukraine will also regulate the crypto-assets market under the sponsorship of the National Securities and Stock Market Commission (NSSCM). It will also be made liable for fines on frauds for violations and illegal investments.
The Ministry of Finance will also be working towards amending Ukraine’s Tax and Civil Codes in order to launch the virtual assets market. Ukraine’s vice prime minister and digital transformation minister, Mikhail Fedorov, has hailed this new law as an opportunity for business development for the country.
Subsequent to the legalisation of Bitcoin in Ukraine, foreign and Ukrainian crypto companies will be able to legally operate in this market even as Ukranian nationals will be able to securely access the market for global virtual assets.
What inspired the enactment of this law?
Ukraine has received $100 million (Rs 76,200 crore) of crypto donations from all across the world as part of the relief efforts during its war against Russia. The donations have also been used to support the funding of weapons for the Ukrainian armed forces by Zelenskyy.
After the legalisation day, a sum of $15 million (Rs 1,143 crore), including the donations, was sent in Bitcoin and Ether. On 4th March, Ukraine’s Deputy Minister of Digital Transformation Alex Bornyakov said that the money was being spent on military equipment.
The Ukraine cryptocurrency legalisation comes close on the heels of more and more countries favouring crypto after El Salvador became the first country to adopt Bitcoin investment. In the arriving section, we will now discuss the role crypto has played in Ukraine during the war against Russia.
Role of crypto in Ukraine during the Russian war?
With the start of the Russian war, Crypto became one of the mediums of donations for the Ukrainian government. An analysis done by the Center for Strategic and International Studies (CSIS) has inferred that cryptocurrencies offer Russian and Ukrainian people value and a medium of exchange in turn helping them tackle the impact of humanitarian sanctions and war costs.
On 26th February, the Ukrainian government began soliciting crypto donations publicly using Bitcoin and Tether thus expanding the capacity to accept cryptos in 70 forms including non-fungible tokens (NFTs). This was being done with the help of the country’s largest crypto exchange called Kuna.
Ukraine received a donation of $10 million (Rs 7,620 crore) from Binance, a global crypto exchange, to aid in the Ukraine humanitarian crisis. FTX, a Bahamas-based cryptoexchange, had also announced the donation of $25 (Rs 1,905) to each Ukrainian. Justin Sun, head of the Tron Dao platform, also donated $200,000 (Rs 1.5 crore).
The changes occurring in Ukraine have been reflected in other countries too.
Implementation of Cloud technology by the government agencies
With the passage of the virtual assets law,the NSSCM and the National Bank, under the leadership of Fedorov, has begun what it calls a legal market for Bitcoin in Ukraine. The Verkhovna Rada, Parliament of Ukraine, has also approved the cloud services law. The objective of the bill is to process and protect data using cloud-computing technology, provide cloud services, and more efficient use of public resources with the introduction of new technologies.
According to Fedorov, the law will accelerate Ukraine’s entry into the top cloud service providers of the world, such as AWS, Google Cloud, and Microsoft thereby encouraging the fabrication of more and more data centres.
Further, the Digital Development Ministry’s decision to expand the “virtual assets” market will place Ukraine as an innovative digital nation in Europe’s financial sector.
Key takeaways,
- Ukraine has made Bitcoin legal as of 17th February 2022.
- The law on crypto aims to create a regulatory framework in the Ukrainian crypto market.
- Ukraine has received donations of $10 million post the war against Russia.
- Government agencies are implementing cloud technologies so that public resources are efficiently utilised.
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