Ukraine looking to create legislative cryptocurrency framework

October 31, 2018
Kane Pepi


Ukraine looking to create legislative cryptocurrency framework

With the likes of Gibraltar and Malta recently installing a regulatory framework for cryptocurrencies and blockchain technology, it appears that Ukraine could be the next nation to follow suit. The former Soviet Union nation, which now ties its allegiances to the European Union, has recently had its Ministry of Economic Development and Trade announce that they are in the process of enacting laws that will formally legalize digital currencies.

With the governmental department explaining that the end-to-end drafting process will take up to three years, the initial task will be to define key terms that surround the industry. This includes “virtual currency” “ICO” “mining” and “smart contracts”. As a result, it is hoped that the framework will allow innovative blockchain startups to thrive.

On top of the regulatory objective to legally define crypto-related terms, policy makers will also explore how to best fight off the threats of financial crime that is facilitated through blockchain technology, with a set of stringent guidelines on anti-money laundering (AML) and terrorist financing.  Moreover, Ukraine are also looking to install a blockchain friendly framework that will offer highly favorable taxation rates to those that incorporate their entities in the country.

This isn’t the first time that Ukrainian officials have expressed their interest in formally regulating the cryptocurrency industry. In 2016, Alexei Mushak, a member of the Ukrainian parliament, explained that blockchain legalization was already in the pipeline, subsequently calling for feedback from stakeholders linked to the industry.

To further amplify Ukraine’s potential appetite for the virtual economy, it was also recently announced that the nation’s central bank are considering issuing a cryptocurrency of their own. If the move does go ahead, it is believed that the digital token will be tied to Ukraine’s national currency, the Hryvnia, at a ratio of 1:1. It is also hoped that this strategy will alleviate the threats of uncontrollable inflation.

Ultimately, with more and more jurisdictions expressing their interest in becoming a central hub for all-things blockchain, it appears that competition for that “de-facto” title will soon become fierce.