After the crypto draft bill is adopted, Ukrainians will be able to legally hold, exchange, and spend cryptocurrencies like Bitcoin (BTC), a government official revealed.
Besides allowing payments in cryptocurrencies, the Ukrainian Digital Transformation Ministry proposes lower crypto taxes as the new legislation seeks to pave the way for the industry to enter the country.
Creating a market for crypto services
The new crypto draft law will make cryptocurrencies “a completely legal and common phenomenon for the government and the society,” Ukraines Deputy Minister of Digital Transformation Oleksandr Bornyakov told the financial publication Minfin.
According to Bornyakov, who perceives crypto as the future for both his country and the world, the Ukrainian government doesnt want to “hinder the development of this new industry by over-regulation.”
Bornyakov expects the development of an entirely new market for crypto services, with the new legislation allowing Ukrainians to legally exchange and declare their crypto holdings.
According to the draft, cryptocurrencies wont be recognized as means of payment, however the legislation will allow crypto payments through intermediary services that provide instant crypto-to-fiat conversions, said the official.
The draft law, which will expand the possibilities of crypto use, is being prepared for adoption in the second reading, after it was voted through in the Ukrainian parliament in December.
In order for crypto to enter the country
To protect Ukrainian crypto users, service providers will be required to receive a work permit in Ukraine, according to the draft law designed in a way that will enable foreign businesses to smoothly enter the country.
For this purpose, the legislation provides for the establishment of a new regulatory body – the National Service for Regulation of Virtual Assets.
“This is a simpler procedure than licensing,” Bornyakov told Minfin, adding that the conditions for obtaining a permit wont be difficult.
“The main thing is to prove that there is the necessary amount of capital, and there are no people from the sanctions lists among the founders,” he said, explaining that companies wont be required to register a legal entity in Ukraine.
“We understand that the business with virtual assets is global, so if we set the conditions for registration in Ukraine, cryptocurrencies simply will not enter our country,” he concluded, adding that the list of conditions for obtaining a permit, including for non-residents, are clearly defined in the text of the bill.
According to Bornyakov, the draft bill doesnt address the issue of crypto mining in any way, since the Ministry considers it to be “a completely legal activity,” which does not require additional regulation.
“Work is still underway on the text of the bill on amendments to the Tax Code,” said Bornyakov, revealing a new proposal to lower the rate for individuals to 5% from the current 19.5%.