As an extension of the new public policy which has been developed by the country’s Ministry of Economic Development and Trade, the government of Ukraine has announced their decision to legalize cryptocurrencies by 2021. A press release was published on the Ministry’s website, which elaborated that the government was planning on creating specific and detailed conditions of cryptocurrency related businesses running in a country, and calls Ukraine ” among the top 10 countries in the number of virtual currency users.”
The report then goes in to reveal that the experts in the country have estimated that companies in the country have raised $100 million through initial coin offerings (ICOs) and that crypto trading volumes in Ukraine are over $2 million. However, this fintech sector is developing, surreptitiously, as there exists a legal uncertainty regarding Digital money and their legal status, and questions of taxation, transactions, the signing of smart contracts and so on and so forth. This as claimed by the report results in a negative outcome for all stakeholders as their consumer rights are not legally protected, and complications regarding banking services and regulatory compliance often crop up.
The release adds:
The state in turn lacks taxes and foreign exchange earnings. It has no opportunity to carry out financial monitoring in this area due to lack of statistical information. As a result, foreign investments and opportunities for creating new high-paying jobs are being lost.
In an effort to improve the situation, a two stage regulatory concept is set to be introduced. The first step is that the legal status of cryptocurrencies will be defines and the problems and trends in the market will be deeply analysed. this is scheduled to done in 2018-2019. The second stage, which will take place in 2020-2021, Ukraine will formally recognize cryptocurrency wallet service providers and custodial platforms, in order to promote regularisation and at the same time protect the rights of the customers.
Market participants will have the opportunity to use banking services, to officially attract foreign investments, to conduct ICO / ITO as Ukrainian companies, to conclude smart contracts and to carry out barter transactions for the exchange of goods (services) into virtual currencies.