Ukraine latest country to legalize bitcoin

Ukraine has become the fifth country in as many weeks to lay down some ground rules for the cryptocurrency market, which could signal that governments around the world are starting to think bitcoin is here to stay.

In a nearly unanimous vote, the Ukrainian Parliament has adopted a law that legalises and regulates cryptocurrency. The bill was set in motion last year. 2020.

Until today, crypto currency in the country had existed in a legal grey area. Locals were allowed to buy and exchange virtual currencies, but companies and exchanges dealing in crypto were often under close watch by law enforcement.

Cryptocurrency a ‘scam’

According to the Kyiv Post, the country’s authorities had trended toward taking a combative stance on virtual cash, regarding it as a “scam” and raiding crypto-related businesses, as well as “often confiscating expensive equipment without any grounds.”

For example, just last month, the Security Service of Ukraine (SBU) blocked a network of what it called “clandestine cryptocurrency exchanges” running in the capital city of Kyiv. The SBU claimed these exchanges were facilitating money laundering and providing anonymity of transactions.

Different to El Salvador for now

But this new legislation spells out certain protections against fraud for those who own bitcoin and other cryptocurrencies. Lawmakers have also now taken a stab at defining cryptocurrency core terminology. If signed by the president, virtual assets, digital wallets and private keys are all terms that will be enshrined in Ukrainian law.

Unlike El Salvador’s move this week to adopt bitcoin as legal tender, Ukraine’s crypto law does not facilitate the rollout 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 is part of a wider push by Kyiv to lean into bitcoin.

By 2022, the country plans to open the cryptocurrency market to businesses and investors - also according to the Kyiv Post. Top state officials have also been touting their crypto street cred to investors and venture capital funds in Silicon Valley.

On an official state visit to the U.S. last month, President Zelensky spoke of Ukraine’s budding “legal innovative market for virtual assets” as a selling point for investment, and Mykhailo Fedorov, Ukraine’s Minister of Digital Transformation, said the country was modernising its payment market so that its National Bank would be able to to issue digital currency.