In a near-unanimous vote on Wednesday, the parliament of Ukraine has passed the new legislation that legalizes and regulates cryptocurrency and other digital assets.

The Eastern European country's Parliament has officially enacted the "Virtual Assets Bill," which basically legalizes production, ownership of Bitcoin and other crypto-related businesses throughout the country, as well as regulates the market to protect crypto users from fraud. The Bill now needs to be signed by President Volodymyr Zelensky to become a law.

As per the existing guidelines issued by the Financial Action Task Force(FATF) on Money Laundering, an intergovernmental policy-making group, the new law would allow residents to open and utilize bank accounts for transactions involving digital assets. Prior to this bill, bitcoin-related activities have been targeted, and the judiciary viewed businesses, particularly trading platforms, as suspicious. 

The law was proposed in the Parliament after President Zelensky's recent trip to Silicon Valley, where he met with investors and venture capitalists to seek collaborations in promoting Ukraine's digital economy. The crypto bill was approved by 276 out of 376 members of Parliament.

In response to the new law, Ukraine's deputy minister of digital transformation, Oleksandr Bornyakov, stated: “It will become a powerful incentive for the further development of the crypto-sphere in Ukraine… I am sure that society, business, and the state will benefit from the legalization of the new sector of the economy.”

To purchase goods and services, the locals use the local currency, the hryvnia. The new law on BTC and other digital assets will give Ukrainians more confidence to invest.

Until now, Ukrainian people have been allowed to hold and trade digital currencies without a regulatory framework, so, in the event of a scam or fraud, they lacked the support of the legal system.

Ukraine is forging its own route and doing things differently than El Salvador and paving a way for businesses and investors to use cryptocurrencies with stronger protection from fraud by 2022. Crypto firms will now need to obtain a permit and will be required to pay taxes to operate.

The bitcoin community is becoming more confident as the world is becoming more crypto-friendly. Despite the new law, the bitcoin prices did not change, which is still below the $50,000 mark.

Pavan A

CBW - External Analyst

INDIA