The government of Ukraine is going to legalize cryptocurrencies within three years, in a move that’s reportedly being made as part of a new public policy developed by the country’s Ministry of Economic Development and Trade.
According to a press release published on the Ministry’s website, the government plans on creating clear conditions for cryptocurrency-related businesses in the country. The document notes that Ukraine is “among the top 10 countries in the number of virtual currency users.”
It adds that expert estimates suggest companies in the country have raised $100 million through initial coin offerings (ICOs), and that crypto miners are making $100 million a year within its borders. The government added that cryptocurrency trading volumes are of over $2 million.
Since in Ukraine there is “a legal uncertainty about activities related to virtual currencies (…) including their legal status, taxation of transactions, and the possibility of singing smart contracts,” the country is seeing the fintech sector develop “in the shadows.”
This, the report claims, leads to “negative consequences for all stakeholders,” as there is a lack of proper consumer protection rights, and can lead to complications when it comes to banking services and regulatory compliance for ICO issuers. Users will also have a harder time on-boarding the market.
The release adds:
The state in turn lacks taxes and foreign exchange earnings. It has no opportunity to carry out financial monitoring in this area due to lack of statistical information. As a result, foreign investments and opportunities for creating new high-paying jobs are being lost.
To improve the situation, the Ministry is reportedly introducing a new regulatory concept, that’s set to be implemented in two stages. The first one will see it define the legal status of cryptocurrencies in 2018-2019, and analyze “problems and trends” in the market.
In the second stage, in 2020-2021, Ukraine is set to legally recognize cryptocurrency wallet service providers and custodial platforms. The use of cryptocurrencies will then be regulated. With its new regulatory concept, the government claims, it’ll be able to “protect the rights of consumers” in the space.
Market participants will have the opportunity to use banking services, to officially attract foreign investments, to conduct ICO / ITO as Ukrainian companies, to conclude smart contracts and to carry out barter transactions for the exchange of goods (services) into virtual currencies.
As a result, the state will be able to both attract high-paying jobs, and “increase revenues” thanks to the cryptocurrency space while stimulating the development of a digital economy in the country.
As CryptoGlobe covered, an Estonian payments processor called Paytomat is helping fuel real world adoption of cryptocurrency by making it possible to pay for fruit and vegetables with crypto in countries like Ukraine. Revolutionaries in the country have found a “stateless currency” in crypto.
Some reports suggest Ukraine’s central bank is working on its own central bank digital currency (CBDC).