TL; DR Breakdown
- President Volodymyr Zelenskyy has signed Ukraine’s bill on Virtual Assets
- NSSMC and NBU will be the main cryptocurrency regulators in the country.
Ukrainian President Volodymyr Zelenskyy signed a bill on virtual assets into law, which legalized bitcoin and other digital currencies, amid a surge of crypto donations to aid the country’s defense against a Putin invasion.
“The crypto sector is now legalized in Ukraine,” the Ministry of Digital Transformation tweeted Wednesday. “Foreign and Ukrainian cryptocurrency exchanges will operate lawfully from now on, and banks will create accounts for cryptocurrency firms,” the department added, having previously worked on raising millions of dollars in crypto donations amidst the war with Russia.
The legal definitions for virtual assets are divided into three categories. Virtual assets that operate like profit-bearing security tokens are classified as ‘secured.’ In contrast, assets like Bitcoin were classified as ‘unsecured.’ The third category comprises ‘financial’ virtual assets, including tokenized stocks and stablecoins, as well as central bank digital currency.
The Ukraine government body is in charge of “shaping and pursuing a policy in the field of virtual assets,” as well as publishing permits to virtual asset service providers and conducting supervision and financial monitoring, according to a recent government statement.
Government adopted bill on virtual assets in September
The bill was adopted by Verkhovna Rada in September and sent to the president, who then returned it in October with recommendations for changes to regulatory bodies. Following his suggestions, the Ukrainian parliament passed the law in mid-February. Zelenskyy needed to sign it within ten days, but the Russian conflict intercepted.
Around the time when its most recent modification was published, the crypto legislation required the creation of a distinct crypto regulatory body, but Ukraine’s president rejected the bill on virtual assets proposal, claiming it would cost money. Lawmakers agreed and relieved the digital ministry of its regulatory obligations.
NSSMC and NBU to be the main crypto regulators
According to the legislation, Ukraine’s National Securities and Stock Market Commission(NSSMC) and NBU will be the main crypto regulators under amended rules, will have the power to set national cryptocurrency policies, grant licenses to firms dealing with crypto, and act as a financial watchdog.
Embracing the new law, Ukraine’s first crypto exchange, Kuna, will no longer be bound by the old legislation, which prevented it from transferring cash directly to crypto-friendly vendors. In the meantime, Ukraine has teamed up with Bahamas-based exchange FTX to convert bitcoin donations into fiat money for deposit at the National Bank of Ukraine.
Aid for Ukraine, a Russian-language donation website that accepts Bitcoin, Ether, Tether, Polkadot, Solana, Dogecoin, Monero, Icon, and Neo, as well as contributions from staking platforms FTX and Kuna and a staking platform called Everstake has partnered with the Ukrainian government officials to create a website where users may vote for what they believe are the most important sectors to fund with the donated crypto.