Key Takeaways
- Lawmakers in Ukraine have submitted a draft bill to parliament seeking to allow the Ukrainian National Bank to include BTC among the country’s reserves.
- The final fate of the reserve bill lies with the Ukrainian National Bank, but Lawmakers have supported the proposal.
- Passing the bill would attract foreign investors and create new job opportunities for the country’s residents.
Ukrainian lawmakers have submitted a draft bill to the country’s parliament that would enable the National Bank of Ukraine to include cryptocurrencies, such as Bitcoin, in its country’s reserve assets.
According to a report citing People’s Deputy Yaroslav Zheleznyak, First Deputy Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, the Draft law No. 13356 was registered in the Verkhovna Rada. The bill aims to enable the National Bank to include virtual assets in Ukraine’s gold and foreign exchange reserves.
Crypto Assets alongside Gold and Foreign Currencies
The bill number proposes amendments to the law “On the National Bank of Ukraine” regarding the inclusion of crypto assets alongside gold and foreign currencies. Writing on Telegram, Zheleznyak stated:
“Ukraine may have its crypto reserve. Such an initiative has been registered. According to the bill, we grant the National Bank the authority to include virtual assets in Ukraine’s reserves. At the same time, the decision on how, when, and how much should be made by the regulator itself. That is, we do not oblige and leave it to their professional choice.”
Help Strengthen Macroeconomic Stability
The lawmaker further explained that according to the people’s deputies, the crypto reserve asset bill aims to integrate Ukraine into global financial innovations. He added that proper management of crypto reserves will help strengthen macroeconomic stability and create new opportunities for the development of the digital economy, he believes. He stated further that:
“The idea is not new: the US is already forming a strategic crypto reserve and many initiatives at the level of individual states; El Salvador, China used BTC to attract $20 billion. Switzerland, Brazil, Pakistan, Kyrgyzstan, some EU countries, and the Czech Republic are also working on including virtual assets in their reserves.”
Not Being Left Behind
While decisions about the final fate of the crypto asset reserve bill lie with the National Bank of Ukraine, lawmakers are in support of creating a potential state crypto asset reserve so the country isn’t left behind as the rest of the world moves forward with Bitcoin and cryptocurrency adoption. The lawmakers have also discussed the possibility of establishing a national crypto reserve during a video commentary with Binance’s regional head for Central and Eastern European countries and Central Asia, Kirill Khomyakov.
Conclusion
The absence of clear legislation on cryptocurrencies has led to several negative consequences. In situations where there is a legal vacuum, companies, and potential investors will not proceed due to the lack of clear rules, which has ultimately hindered the development of this area in the country. Should the crypto reserve asset bill proposal be passed, the legalization of virtual assets would create a favorable environment that would attract foreign investors, generate new jobs, and provide Ukrainians with access to new financial instruments.
Frequently Asked Questions
Is Ukraine crypto-friendly?
Citizens and Ukrainian businesses lack clear guidelines regarding lawful activities, profit registration, and tax payments on transactions involving virtual assets. Ukrainian banks, fearing uncertainty and possible sanctions from the National Bank of Ukraine, block any cryptocurrency transactions.
Can you use cryptocurrency in Ukraine?
On 16 March 2022, President Volodymyr Zelensky approved a bill formally legalizing cryptocurrency in Ukraine. After the war began, Ukraine quickly leveraged the speed and decentralized nature of crypto to raise funds.
Is crypto taxed in Ukraine?
Ukraine’s top financial regulator has proposed taxing most cryptocurrencies as personal income, with potential exemptions for foreign asset-backed stablecoins. The proposed tax scheme includes an 18% personal income tax, with an additional 5% wartime levy applied to certain cryptocurrency transactions.
