Ukraine is moving closer to aligning with European rules for cryptocurrency regulation. Parliament is currently debating a draft law aimed at setting new rules for the functioning of the digital asset market.

The regulation is expected to have a global impact, partly due to the country’s large state holdings. Ukraine owns 46,351 bitcoins worth over $5.6 billion, placing it right behind the United States, China, and the United Kingdom. At the same time, the country proposed the creation of official Bitcoin reserves, similar to the United States, the Czech Republic, Brazil, and Poland. [1]

New Law to Boost Transparency and Investor Protection

The draft law is based on the European Union’s approach and principles. Its goal is to increase transparency, strengthen investor protection, introduce anti–money laundering measures, and set licensing rules for cryptocurrency exchanges and trading platforms. [2]

“The draft law on taxing virtual asset transactions is in its final stage,” said Danylo Hetmancev, Chairman of the Parliament’s Finance Committee. According to him, the law should be passed by the end of August. [3]

Legalizing Crypto with a 10% Tax

If approved, owning cryptocurrencies and other digital assets will become legal in Ukraine. Holders will be required to pay a 5% income tax plus an additional 5% defense levy — a total of 10%.

This tax rate was set after consultations with domestic economists as well as experts from international institutions, including the International Monetary Fund.

“We need to provide the market with legal certainty. The state must recognize cryptocurrency owners and the exchanges that operate in this field. Owners must be able to protect their rights, because this market is now too big to ignore,” Hetmancev added.

At the same time, he warned that those who try to remain in the “grey zone” will face sanctions after the law is passed, starting with financial penalties.

According to estimates, the legalization of cryptocurrencies could bring Ukraine hundreds of millions of dollars annually — revenues that are crucial for the state budget at a time of ongoing Russian aggression.

Sources:

[1] https://coingeek.com/ukrainian-lawmakers-introduce-digital-asset-reserve-bill/

[2] https://coingeek.com/ukraine-weighs-new-bill-aligning-its-crypto-laws-with-eu/

[3] https://cointelegraph.com/news/ukraine-weigh-bill-regulating-crypto-market-august