A high-ranking representative of the National Bank of Ukraine said that an excessive presence of regulators and too many regulations against the cryptocurrency industry in the country is being an obstacle in the development of the cryptocurrency industry.
The banker insisted that instead of bogging down the industry with regulations, the country should implement proper laws and regulations in a balanced manner if the industry is to flourish in Ukraine.
Mikhail Vidyaking, the head of Strategies and Reforms Department at the National Bank of Ukraine (NBU), is convinced that the problems that have arisen against the cryptocurrency industry in the country are mostly borne out of bureaucracy. While cryptocurrencies have not been officially defined, which makes them increasingly difficult to keep track of, there are simply too many regulators who have the responsibility of regulating the industry.
It seems that the situation is akin to the phrase, “Too many cooks spoil the broth.”
Vidyakin himself supports regulations in favour of allowing the industry to develop as he believes that the banking sector embracing fintech might open up new and faster channels for the delivery of financial services. However, he said that a systematic approach is needed now, as authorities in Kiev first need to reduce the number of regulatory bodies with oversight of the crypto industry and then draw up a framework that will address the lack of proper regulations and legal definitions for the new financial innovations.
Vidyakin is not the first Ukrainian official to call for the legalization and regulation of cryptocurrencies in the country. Last January, Ukraine’s minister of justice Pavel Petrenko made similar recommendations. He insisted that “Bitcoin must be brought into the legal field.”
The lack of proper legal definitions has started to show consequences, though. At a meeting in the National Cybersecurity Coordination in Kiev, members expressed their concern over the “uncontrolled circulation” of cryptocurrencies in the country. The Secretary of the National Security Council Oleksandr Turchynov stressed that “the development of the cryptocurrency market cannot be left unattended.”
However, the silver lining is that in late 2018, the national government announced a new regulatory concept, where Ukraine will fully legalize cryptocurrencies in two stages within the next three years. The legal status of crypto exchanges should be determined in 2019. Crypto wallet providers and custodial platforms will be regulated by 2021.
The change in regulatory oversight is a welcome move by many in the crypto community as the country trades in UD$ 775 million annually and proper regulations would ensure that the digital assets get treated similar to fiat currencies and have a better legal climate to operate in.