- Amid the ongoing Russian invasion, Ukraine has legalised cryptocurrency.
- Ukraine has received millions in cryptocurrency donations since the invasion.
- This will also allow cryptocurrency exchanges to let users, including the government, convert their crypto holdings to fiat.
War-torn Ukraine has legalised cryptocurrencies after receiving millions in crypto donations since the Russian invasion began in late February. Ukraine president
Volodymyr Zelenskyy signed a virtual assets bill on March 15, allowing the country to establish and regulate a crypto market.
“From now on foreign and Ukrainian cryptocurrencies exchanges will operate legally and banks will open accounts for crypto companies,” tweeted Ukraine’s Ministry of Digital Transformation.
According to the ministry’s statement, Ukraine’s stock market regulator will be tasked with keeping an eye on cryptocurrency exchanges.
Ukraine’s National Securities and Stock Market Commission will also be tasked with outlining a policy for virtual assets, according to an announcement the Ukrainian government made in February.
Tax and civil codes will subsequently be modified, with the
Ukrainian Ministry of Finance working on amendments already.
It is worth pointing out that cryptocurrencies were not illegal in Ukraine – just like in India – but giving them the legal status opens up new avenues for the government to generate revenues via taxes, and regulate trading to ensure safety for users.
Why did Ukraine legalise cryptocurrency?
Post the Russian invasion of Ukraine, the country received over $100 million in cryptocurrency donations.
Post the legalization, Ukraine’s first crypto exchange,
Kuna, will now be able to convert the cryptocurrency to fiat – Ukraine’s legal tender, hryvnia. This would also help bolster the Ukrainian government’s cash reserves, apart from helping Ukrainians who trade in crypto.
The other major example of the legal adoption of cryptocurrency is El Salvador, which made Bitcoin legal tender back in 2021.
While cryptocurrency is not legal in India yet, the government proposed a tax of 30% on virtual assets. Although cryptocurrency is not technically legal in India yet, this will allow the government to mop up revenue from crypto trading.
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