Ukraine is the fifth country in so many weeks to set some ground rules for the cryptocurrency market, a sign that governments around the world are realizing that bitcoin is here to stay.
In an almost unanimous vote, the Ukrainian Parliament passed a law legalizing and regulating cryptocurrency. The bill was launched in 2020 and is now addressed at the table of President Volodymyr Zelensky.
Until today, cryptography in Ukraine existed in a legal gray area.
Locals were able to buy and exchange virtual currencies, but companies and exchanges that worked in cryptography were often monitored by law enforcement.
According to the Kyiv Post, authorities have tended to take a combative stance when it comes to virtual cash, calling it a “scam,” attacking cryptography-related companies and “often confiscating expensive equipment for no reason”.
In August, for example, the Security Service of Ukraine (SBU) blocked a network of so-called “clandestine cryptocurrency exchanges” operating in the capital of Kiev. The SBU claimed that these exchanges facilitated money laundering and provided the anonymity of transactions.
The new legislation also explains certain protections against fraud for those who own bitcoins and other cryptocurrencies and, for the first time for the Verkhovna Rada, lawmakers have taken a stab at defining the basic terminology of the world of cryptography. If signed by the President, virtual resources, digital wallets and private keys are terms that will be included in Ukrainian legislation.
Unlike El Salvador’s proposal this week to adopt bitcoin as a legal tender, Ukraine’s cryptocurrency law does not facilitate the launch of bitcoin as a form of payment, nor does it put it on an equal footing with the hryvnia, the country’s national currency.
However, today’s vote on the former nuclear power is part of Kyiv’s broader push to lean on bitcoin.
In 2022, the country plans to open the cryptocurrency market to companies and investors, according to the Kyiv Post. Senior state officials have also been announcing their street credit lending to investors and venture capital funds in Silicon Valley.
On an official state visit to the United States last month, President Zelensky spoke of Ukraine’s nascent “innovative legal market for virtual assets” as a point of sale for investment and Mykhailo Fedorov, Ukrainian minister of digital transformation, he said the country was modernizing its payments market. so that its National Bank can issue digital currency.
But for bitcoin sponsors like Jeremy Rubin, the new law of Ukraine and political promises like these are not too much.
“Improving Ukraine’s legal status for bitcoin is a laudable symbolic move toward a world that universally respects individual rights,” said Rubin, CEO of Bitcoin Judica’s R&D lab. “But it’s just symbolic: Bitcoin seeks neither permission nor forgiveness in its mission to protect persecuted communities from unjust governments.”
Last domino that falls
Ukraine joins a long list of countries that fold bitcoins into national legislation.
Two weeks ago, Cuba – a notoriously conservative government that still conforms to the traditional Marxist way – passed a law to recognize and regulate cryptocurrencies, citing “reasons of socio-economic interest.”
Last month, the United States proposed rules on cryptography “brokers” on its $ 1 trillion infrastructure bill, and a new German law now allows funds that were previously banned from investing in cryptography to allocate up to 20% in virtual currencies like bitcoin.
Panama seems to be next on the deck. The Central American country is releasing a draft of its own cryptocurrency law.
This list is incomplete: it seems to be the last falling domino pattern, as there are more governments that recognize the permanence power of cryptocurrencies like bitcoin.