The country receives millions in crypto donations.
Legalizing Cryptocurrency Sector
The President of Ukraine, Volodymyr Zelenskyy, signed a bill that legalizes the cryptocurrency sector in the country. The move comes as the country has received tens of millions of dollars in crypto from various groups and individuals who wish to help the country’s effort against Russia.
Last month, Ukraine’s parliament signed a bill that creates conditions to introduce a legal market for virtual assets in the country. In that case, Ukrainian banks can open accounts for crypto firms.
The National Bank of Ukraine and the National Commission on Securities and Stock Market were appointed as financial watchdogs.
In that case, companies and agencies handling virtual assets will have to register with the government. This will protect the crypto holdings of its citizens. With the bill, the assets will have the same legal force as fiat currency.
“Today, the President signed the law “On Virtual Assets”. We are launching a legal market for virtual assets in Ukraine and bringing the cryptosector out of the shadows.”Fedorov
To support the Armed Forces of Ukraine, people are using cryptocurrencies to donate. Within three weeks of the war, the country’s Crypto Fund raised over $54 million in crypto.
Cryptocurrency became a prime place for the country to receive donations. But it’s also seen as a lifeline for Russians who were hit by financial sanctions.
The number of ordinary Ukrainians buying up crypto assets is increasing. After Russia starts invading Ukraine, trading on domestic exchange Kuna increased by 200 percent. Central banks are limiting e-money transfers and cash withdrawals as a result of the invasion.
“From under $1 million on February 21, trading volumes on Kuna reached highs of $4.8 million today, the highest volume seen on the exchange since May 2021, before stabilizing around $2 million.” –decrypt.co
Several countries around the world are assessing how to regulate the crypto industry. In El Salvador, it has made bitcoin a legal currency. It’s also seeking to make it a hub for cryptocurrency activity.
China, however, followed a different route. It has wiped out trading and crypto mining.
US President Joe Biden, on the other hand, signed an order to call federal agencies to take an approach to regulate digital assets. The order isn’t legislation, though, to regulate the industry.
Countries with no specific crypto regulation sought to bring exchanges under the scope of financial regulators. In the UK, crypto exchanges need to register with the Financial Conduct Authority. The exchanges must follow money laundering rules.
Ukraine, however, is seeking a law that is tailored to the crypto or digital asset industry.
Before the war, cryptocurrencies were already popular in Ukraine. Days before the invasion, Ukraine legalized Bitcoin. Ukrainians had become active retail users of digital assets in 2020.
With the signed law, the first crypto exchange, Kuna, will no longer have limitations when it comes to helping the country spend the donations and convert crypt to fiat. Ukraine also partnered with FTX to convert crypto contributions into fiat to help the war effort.
“Today we have to build new sectors of the economy. After all, business development is the key to Ukraine’s stability.”