Ukraine is the fifth country in as many weeks to set basic ground rules for the cryptocurrency market, indicating that governments all around the world are recognizing bitcoin as a legitimate currency.
The Ukrainian Parliament passed a measure legalizing and regulating bitcoin in a near-unanimous vote. The measure was introduced in 2020 and is presently on its way to President Volodymyr Zelensky’s desk.
Until now, cryptocurrency has lived in a legally murky area in Ukraine.
Locals were allowed to buy and exchange virtual currencies, but law enforcement kept a watchful eye on crypto firms and exchanges.
According to the Kyiv Post, officials have taken a hostile approach to virtual currency, branding it a “scam,” raiding crypto-related enterprises, and “sometimes confiscating pricey equipment without any justification.”
For example, in August, the Security Service of Ukraine (SBU) shut down a network of “clandestine cryptocurrency exchanges” in Kyiv, the country’s capital. The SBU alleged that these exchanges were used to facilitate money laundering and provide transaction anonymity.
Could Ukraine Be Risking?
The new legislation also spells out basic fraud protections for those who possess bitcoin and other cryptocurrencies, and lawmakers have attempted to define core terminology in the crypto realm, which is a first for the Verkhovna Rada. Virtual assets, digital wallets, and private keys will be incorporated into Ukrainian law if signed by the president.
Unlike El Salvador’s decision this week to make bitcoin legal money, Ukraine’s crypto law does not make it easier to use bitcoin as a means of payment, nor does it place it on par with the hryvnia, the country’s currency.
The former nuclear power’s vote today, however, is part of a larger campaign by Kyiv to embrace bitcoin.
According to the Kyiv Post, the country wants to open the cryptocurrency market to businesses and investors by 2022. Top state officials have also been promoting their crypto credentials to Silicon Valley investors and venture capital funds.
However, for bitcoin supporters like Jeremy Rubin, Ukraine’s new law and political promises are meaningless.
“The increased legal position for bitcoin in Ukraine is a wonderful symbolic indication that we are progressing towards a future that universally respects individual rights,” stated Rubin, CEO of bitcoin R&D lab Judica. “However, it is merely symbolic – in its purpose to safeguard persecuted communities from unjust governments, bitcoin asks neither permission nor forgiveness.”
Ukraine has joined a lengthy list of countries that have incorporated bitcoin into their national legislation.
El Salvador Was First to Adopt Bitcoin
El Salvador became the first country to adopt bitcoin as legal tender and keep it on its balance sheet just this week. President Nayib Bukele’s political future is fundamentally tied to the outcome of this statewide bitcoin experiment.
Cuba, a notoriously conservative government still committed to old Marxist values, enacted a law two weeks ago recognizing and regulating cryptocurrency, claiming “socioeconomic interests.”
The US suggested restrictions around crypto “brokers” in its $1 trillion infrastructure bill last month, while a new German law now permits funds that were previously prohibited from participating in crypto to devote up to 20% of their assets to virtual currencies like bitcoin.
Panama appears to be the next stop. The Central American country is considering enacting its cryptocurrency legislation.
This is by no means an exhaustive list; rather, it appears to be the latest domino to fall as more governments recognize the long-term viability of cryptocurrencies like bitcoin.
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