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Ukraine: New Policy will Legalize Cryptocurrencies

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The Economic Development and Trade Ministry in Ukraine enacted a new state policy which sees cryptocurrencies becoming legal in the region.

Announcing the new policy

When announcing this new policy, officials presented an outline of their goals for this policy, saying that they want to: “create understandable conditions for conducting activities in the field of virtual assets and virtual currencies.”

They are also focusing on increasing cryptocurrency adoption levels in Ukraine. Therefore, with clearer transparency in the sector, blockchain development can be nurtured and help improve the fortunes of all entities in the country that adopt this technology.

To date, Ukraine has been one of the global leaders in the adoption of blockchain technology. They have been attracting blockchain and cryptocurrency startups over the past couple of years. This is due to their open-minded attitude towards digital currency. However, the government was not legally recognizing cryptocurrency. In face, no regulatory framework has been established.

By moving towards legalizing cryptocurrencies on an official level, they will likely attract more and more startups to their country.

What will this new policy look like?

The ministry has been working towards establishing important legal terms relating to the cryptocurrency sector. They aim to determine guidelines for token classification. Additionally, they will be touching upon issues that relate to smart contracts and cryptocurrency mining. Therefore, this work will be ongoing.

There will be two separate stages to the implementation of this new state policy. They hope is to have this policy in full effect by 2021.

In addition to the new state policy, the government notably has brought in a new taxation bill. This outlines a new 5% tax that is payable by entities and individuals with cryptocurrency holdings.

The National Bank of Ukraine (the country’s central bank) even considers creating a new Central Bank Digital Currency. This would be useful since it will enable quicker and more cost effective fiat currency transfers throughout the country.

Many countries will be watching with keen interest to see how this new state policy performs. However, regulation clarity is an issue that the blockchain sector has been struggling with across the world. Ukraine is currently many steps ahead of several other major jurisdictions in terms of their efforts relating to cryptocurrency and the adoption thereof.

 

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