The fifth country to introduce some ground rules for the crypto market in as many weeks is Ukraine, which is an indicator that governments around the world are realizing that Bitcoin is going to stay. The Ukrainian Parliament adopted a law in an almost unanimous vote to legalize and regulate crypto in the country. The bill had been set in motion back in 2020 and is now heading towards the desk of Ukraine’s president, Volodymyr Zelenskyy. Before this law was adopted, crypto had existed in the country in a legal grey area. Local were permitted to buy and sell these digital currencies, but exchanges and companies dealing in cryptocurrencies were closely monitored by law enforcement.
These authorities were taking a rather combative stance when it came to these virtual currencies, as they regarded them as a ‘scam’. Therefore, they often raided crypto-related businesses and also confiscated expensive equipment, even when there was no ground to do so. For instance, the Security Service of Ukraine (SBU) had blocked a network in August, which it defined as ‘clandestine crypto exchanges’ that were operating in the capital city of Kyiv. According to the SBU, these exchanges were facilitating anonymous transactions and money laundering.
Certain protections are also highlighted in the new legislation against fraud for people who own Bitcoin as well as other cryptocurrencies. Moreover, the lawmakers in Ukraine’s parliament have also decided to define the core terminology that’s part of the crypto space. If the president signs it, then virtual assets, private keys and digital wallets are terms that will become a part of Ukrainian law. While El Salvador decided to roll out Bitcoin as legal tender, the crypto law in Ukraine is not facilitating the rollout of the pioneer cryptocurrency as a form of payment and has no plans of putting it on equal footing with the national currency of Ukraine i.e. hryvnia.
However, the vote on Thursday by the former nuclear power is part of a bigger push by Kyiv to move towards Bitcoin. The country wants to open the crypto market to investors and businesses by 2022. The top state officials have also been highlighting their crypto street cred to venture capital funds and investors in Silicon Valley. Last month, Zelensky visited the US as part of an official state visit and talked about the budding market for digital assets in Ukraine as a selling point for attracting investments. However, bitcoin supporters like Jeremy Rubin don’t think that the political promises and new laws in Ukraine amount to much.
Rubin said that these were only symbolic moves because bitcoin doesn’t need permission to protect people from unjust governments. Ukraine is just the latest country to incorporate bitcoin into national law. El Salvador had only recently adopted Bitcoin as legal tender and the country’s president, Nayib Bukele, has basically tethered his political fate to the result of this bitcoin experiment nationwide. Before that, it was Cuba that had passed a law for recognizing and regulating cryptocurrencies due to socioeconomic interests.