The Ukrainian government, in an official statement, confirmed their intentions to legalize and regulate cryptocurrencies in within their jurisdiction.
The Economic Development and Trade Ministry in the country recognizes and considers cryptocurrency to be a promising technology. As a result, they initiated a new state policy to keep a watchful eye on digital assets and cryptocurrency-related sectors. The policy is scheduled to come into full effect by the end of 2021.
The primary purpose is to form a regulatory structure and straightforward conditions for the way digital assets can be used, invested and transacted in Ukraine. Generally, this new crypto law aims at legally controlling all activities related to cryptocurrencies.
The primarily targeted activities include ITOs and ICOs, taxation, and use of banking activities that are currently unregulated. The government felt it necessary to regulate this space to reduce the negative consequences for stakeholders who sometimes lose their assets and investments to individuals engaged in illegal activities within this largely unregulated market.
The Regulatory Two-Part Framework Plan
All through the remaining part of 2018 and the entire 2019, the Ukrainian government will put together a clear regulatory guideline to manage and govern the local cryptocurrency market. It will be mandatory for all the crypto trading platforms to implement Anti-Money Laundering (AML) and Know Your Customer (KYC) systems. These systems will assist the relevant local authorities to keep a watchful eye on the market.
The second part of this policy will get launched between 2020 and 2021. During this time, the government expects to engage in smart contract protocols, crypto mining industry, and taxation. This part of the initiative will aim at recognizing cryptocurrencies as a stable, established industry and an actual asset class.
Previous studies of this new Ukrainian crypto policy reveal that the government’s official document proposes a 5% tax payable for cryptocurrency holdings. This rate is a bit low when compared with other countries like the United Kingdom and France which have imposed at least a 10% tax on all types of cryptocurrency investments.
Ukraine’s National Bank also considers setting up a brand new Central Bank Digital Currency. This type of currency would be highly useful because it will provide for quick and cost-effective fiat currency transfers everywhere in the country.
Cryptocurrency policies around the world
Many governments are acknowledging that cryptos and blockchain can have a positive impact on their financial systems. They have also recognized these digital currencies as properties worthy of significant investment. Ukraine is not an exception in the creation of regulations and legislation policies. China also created a regulatory draft recently via its internet information office seeking to control how blockchain start-ups are launched and operated.
If China’s proposal is adopted, it will become one of the first notable regulatory policies for the blockchain industry in the country. South Korea has also delved into the thought of a universal crypto regulation. A senior official, speaking profoundly on behalf of South Korea’s Financial Supervisory Service (FSS), suggested the creation of sizeable international cooperation between ICOs and cryptocurrencies regulators.
The governor of FSS, Yoon Suk-Heun, proposed for the set up of greater cooperation. He was speaking during the recent Integrated Financial Supervisors Conference’s (IFSC) opening ceremony held in Seoul. This event was attended by various officials and individuals representing at least 15 countries.
As Ukraine delves into this new space, many countries around the world will keenly watch how the new crypto state policy will perform. Nevertheless, the blockchain sector regulation policy is not clear in many countries worldwide. Ukraine’s bold step puts it way ahead of many other states around the world with regards to cryptocurrency adoption and regulation.
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