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Ukraine Considering Full Scale Adoption of Cryptocurrency

The Ukranian government validated its plans to work on legalizing the cryptocurrency and its regulatory frameworks in the nation, according to an official announcement.

In Ukraine, The Economic Development and Trade Ministry published a new state policy to oversee various cryptocurrency-related sectors as a part of a proposal to consider and acknowledge cryptocurrency as an emerging technology which will be apparently fully executed by the end of 2021.

The government of Ukraine, in order to completely adopt the cryptocurrency culture, will incorporate regulatory frameworks during 2018 and 2019, to strictly govern the local cryptocurrency exchange market in its two-part plan. Crypto trading platforms under the obligation to monitor the market will be expected and demanded to implement Know Your Customer (KYC) and Anti-Money Laundering (AML) systems to aid local authorities.

The government is aiming to research the cryptocurrency mining industry by 2020. Smart contract protocols and taxation will be the second part of the initiative to value cryptocurrencies as an asset class and a time-honored industry.

According to a researcher, Denis Zarytsky an official document of Ukraine government
proposed an important decision of charging a 5 percent fee as a tax from cryptocurrency holders, a rate that is noticeably lower than other counties like France and the UK who have levied around 10 percent tax on cryptocurrency investments.

“They aim to determine guidelines for token classification. Additionally, they will be touching upon issues that relate to smart contracts and cryptocurrency mining. Therefore, this work will be ongoing. There will be two separate stages to the implementation of this new state policy. The hope is to have this policy in full effect by 2021. In addition to the new state policy, the government notably has brought in a new taxation bill. This outlines a new 5% tax that is payable by entities and individuals with cryptocurrency holdings.”

Although in the running year Australia and Japan have also taken a positive step and removed the double taxation on crypto who have earlier acknowledged cryptocurrency as properties and used to charge a higher amount.

In October, Yuriy Derevyanko, a member of the anti-corruption Movement of New Forces and a legislator of Ukraine, while recognizing cryptocurrencies potential in the economic growth mentioned the complete elimination of taxes on crypto by the end of 2020. “I believe we need to impose a moratorium on taxation of [the crypto] area for the next 10 years. We have to regulate and legalize this segment, which will become an engine for a new
economy.”

The upcoming three years will be seen as very significant because there is a possibility of releasing a constructive draft regarding cryptocurrency sector and blockchain technology due to the active interest of both the opposing and the ruling party of Ukraine.

However, countries like Singapore, South Korea, Japan, Switzerland, the UK, and France already displaying themselves crypto friendly economies and provided the infrastructure to the entrepreneurs for the growth towards the new asset class.

Denis Zarytsky said:

The National Bank of Ukraine (the country’s central bank) even considers creating a new Central Bank Digital Currency. This would be useful since it will enable quicker and more cost effective fiat currency transfers throughout the country.

Many countries will be watching with keen interest to see how this new state policy performs. However, regulation clarity is an issue that the blockchain sector has been struggling with across the world. Ukraine is currently many steps ahead of several other major jurisdictions in terms of their efforts relating to cryptocurrency and the adoption thereof.

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