As countries worldwide race to adopt cryptocurrencies as legal tender for use in commerce, Ukraine has announced a new digital asset law aimed at providing a legal framework for day-to-day use of Bitcoin and other cryptocurrencies as well as a new digital hryvnia CBDC.
In an interview last Friday, Oleksandr Bornyakov, the Ukrainian Deputy Minister for Digital Transport, revealed renewed efforts at legalising crypto payments for use by Ukrainian citizens in the shape of a new draft bill set to go before the Verkhovna Rada (Ukraine’s unicameral parliament).
The law will make commercial payments and crypto trading completely legal in Ukraine.
Furthermore, the regulatory framework (made compatible with EU framework’s) will include provisions aimed at protecting investors from risky crypto investment opportunities, as well as legal avenues for the easy declaration of digital asset holdings. The move aims to bringing parity between decentralised finance and traditional old-school centralised banking.
The bill also establishes a permit regime for crypto exchanges to serve Ukrainian customers.
Crypto will be more legal than the US dollar in Ukraine
In a surprising stance, the legislation will legalise crypto payments conducted through intermediaries such as DashDirect or Paypal, this facilitates two-way protections for both consumers and merchants in crypto-fiat conversions – ensuring the equivalent value in Ukraine’s hryvnia currency is maintained.
As it stands, there is no legislation in Ukraine legalising the US dollar as a legal tender – so the passage of this bill could mark a significant adoption moment in which a major European country openly favours decentralised cryptocurrencies to the former supremacy of the USD.
The bill is currently approaching its second reading in the Verkhovna Rada following recommendations from the Digital Transformation committee, this follows a successful first reading back in January.
Cryptocurrencies are a hot topic in Kiev, the country topped ChainAnalysis’ 2020 Global Crypto Adoption Index.
And last year, Ukrainian President Volodymyr Zelensky announced that his government and the National Bank of Ukraine were working on a national CBDC – the digital hryvnia.
The Verkhovna Rada passed the CBDC linked payment services law last June, as part of a package aimed at delivering cutting-edge innovations to the Ukrainian financial sector – this included a regulatory sandbox aiming to facilitate crypto industry business.
The digital hryvnia is recommended for use in e-commerce payments.
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