Ukrainian President Volodymir Zelenski has approved the enactment of the Law on Virtual Assets, which legalises Bitcoin and other cryptocurrencies. The Ukrainian government is opening a new portal where internet users can help the country through cryptocurrencies. The goal is to reach 200 million dollars in digital money through cryptocurrencies.
On Wednesday, 16 March, Ukrainian President Volodymir Zelenski signed into law the Law on Virtual Assets, which gives legal support to Bitcoin and other cryptocurrencies in the country. The approval was announced in an official statement from the Ministry and Committee for Digital Transformation of Ukraine.
The legalisation of cryptocurrencies in the country comes after receiving several donations of bitcoin, ether and other currencies aimed at countering Russia’s encroachment on its territory.
On 17 February, the Law on Virtual Assets was passed by the Ukrainian parliament, the Verkhovna Rada, a week before the Russian attack. The law on cryptocurrencies legalises the virtual assets market in the country, which will be regulated by the National Securities Commission, the Stock Exchange and the National Bank of Ukraine.
As detailed in the report, the law defines the legal status, classification and ownership of virtual assets, in order to create mechanisms for monitoring the sector. These new measures will allow crypto exchanges to register and operate legally in the country under the order of Ukrainian government agencies. In addition, cryptocurrency companies will be able to manage operations in the bank as they will open accounts for the new market, the Ministry of Digital Transformation said in a tweet.
Another new measure to be imposed will be the creation of a register of cryptocurrency service providers. The Ukrainian Ministry of Finance will activate the Ukrainian Tax and Civil Codes to launch a virtual asset market with all its attendant legal consequences. “Work is underway to amend the Tax and Civil Codes of Ukraine to fully launch the virtual asset market,” the statement said.
Ukraine ranks first in the adoption of cryptocurrencies, including bitcoin and ethereum, leading to an increase in the number of crypto-investors in the country who will be favoured by the developments and use of new technologies.
More than $80 million received through donations
The Ukrainian government has set up a new cryptocurrency donation programme with the aim of reaching 200 million dollars in digital money. So far, they have raised around USD 80.5 million since the war took place, according to the Slowmist tracking page.
The significant contributions being made are going into official Ukrainian government wallets. The rest is divided among other funds such as the Ukrainian NGO, Ukraine DAOm Aid for Ukraine, Cyber Police Ukraine and Unchain Found.
Although Ukraine already considered cryptocurrencies as a key part of the country’s economic development, a 2021 Chainalysis report noted Ukraine as the country with the fourth highest Bitcoin adoption. Moreover, as noted by cryptocurrency market specialist site CryptoNews, last year, in August, Ukrainians were in third place for cryptocurrency exchange.
Putin clings to cryptocurrencies
As the Ukrainian government paves the way for the virtual currencies market, Russia is also anchoring cryptocurrencies to the Russian economy. Indeed, one of the measures taken by Russian President Putin has been to ban the transfer of currencies to citizens’ foreign accounts. This has been a shining moment for the cryptocurrency market such as Bitcoin or Ether, which can play a crucial role in preventing a downturn in the country’s economy.
The Russian government has approximately $450 billion in foreign exchange reserves. In addition, Russia allows $200 billion worth of loans to be transferred on the foreign exchange swap market.
