Ukraine has just legalised Bitcoin and all cryptocurrencies. Mirroring Russia, the Eastern European country is setting up a regulatory framework for digital currencies.
As fears of a Russian invasion intensify, Ukraine has just legalised Bitcoin and all cryptocurrencies. In a post on Twitter, Mykhailo Fedorov, Ukraine's deputy prime minister, welcomed the adoption of the law by parliament.
"Today we have taken another step: the parliament has passed a law on virtual goods! This will legalise cryptocurrency exchange platforms and cryptocurrencies, and Ukrainians will be able to protect their assets from possible abuse or fraud," Mykhailo Fedorov argues, highlighting Ukrainians' appetite for digital assets. According to blockchain analytics firm Chainalysis, Ukraine is the 5th most used country for cryptocurrencies, behind Vietnam, India and Pakistan.
UKRAINE SETS UP LEGISLATIVE FRAMEWORK FOR BITCOIN AND CRYPTOS
The law passed by the parliament gives a legal framework to crypto-currencies. This regulatory framework will allow Ukraine to enter the digital asset market. Note that the law defines a "virtual asset" as an asset, but not as a means of payment. Similarly, Ukraine separates assets backed by fiat currency, such as USDC or USDT stablecoins, from unsecured assets, whose price is volatile (Bitcoin, Ether,...).
This legislation comes in a particular context. With the US, Nato and the vast majority of the international community fearing an imminent Russian-led invasion, many Ukrainian volunteer and hacker groups have been receiving Bitcoin donations to hinder Russian actions. According to Elliptic, a blockchain analytics company, these hackers supporting the Ukrainian government have received large donations in cryptocurrencies in recent weeks.
Nevertheless, Ukraine had already signalled its intention to open up to cryptocurrencies before the tensions with Russia. Last September, the National Bank of Ukraine (NBU), the body responsible for issuing currency and ensuring the country's financial stability, had already pledged to support the adoption of crypto assets.
Note that Russia announced similar legislation a few days ago. Under the leadership of Vladimir Putin, the Russian government has introduced a bill to treat crypto-currencies as foreign currencies, like the euro or the dollar. A regulatory framework will also be put in place and mining farms should be allowed on Russian territory.
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