Ukrainian parliamentarians passed a law legalizing bitcoin and all other cryptocurrencies. Here’s what changes.
It was the Ukrainian vice-president, Mykhailo Fedorov, who announced the news on Twitter February 17: Ukraine was already in the top 5 crypto-user countries. Today we are taking another step in this direction: Parliament has passed the Virtual Assets Act! It will legalize exchanges and cryptocurrencies, and allow Ukrainians to protect their assets from possible fraud or abuse “.
The announcement is very important, and should greatly simplify the situation for Ukrainian miners and crypto-enthusiasts. But this is not the first time that exchanges and cryptocurrencies have been authorized in a country: this is the case today in many countries. And it also does not mean that payments can be made in bitcoin.
Ukraine Legalizes Cryptocurrencies: What Does It Mean?
Specifically, the law allows Ukrainians to own and trade cryptocurrencies. It also regulates the conditions under which the purchase and exchange of these assets can take place: it imposes certain standards on sales platforms, and defines sanctions for the latter if they do not comply with these conditions.
The law also indicates that it is up to the Securities Markets Control Commission, a body under the authority of the president, to authorize, or not, certain platforms to sell cryptocurrencies in the country.
Legislation is not necessarily going to bring about major changes overnight in the country: asMykhailo Fedorov explained in his tweet, crypto-assets were already popular in Ukraine. The law gives a legal and official framework to a pre-existing market, and that’s it. The situation in Ukraine is different from that of El Salvador: cryptocurrencies are not accepted there as an official currency.
The legalization of bitcoin and all crypto-currencies is not synonymous with their acceptance as means of payment: many countries have legalized crypto-currencies, without making them an officially recognized currency. This is particularly the case of the United States, Canada, but also many countries of the European Union, including France (which has defined a legal framework with the Pacte law, adopted in April 2019).
For now, El Salvador is the only country in the world where a cryptocurrency is legal tender. The Central American country became the first to recognize bitcoin as an official currency in June 2021, and since September its residents have been able to pay for groceries with the cryptocurrency.
But since then, this measure has not had only positive feedback: the International Monetary Fund announced in January 2022, a little less than 6 months after the start of bitcoin operations, that the country had gone too far. The International Monetary Fund explained in a press release that “ the use of bitcoin poses significant risks to financial stability [du Salvador] and asked the country to back down, and remove the legal status of bitcoin “.