President Volodymyr Zelenskyy of Ukraine legalized cryptocurrency in the country when he signed into law a bill on virtual assets. The law comes at a crucial time for Ukraine as the country is currently fighting an invasion from Russia forces. Since the invasion began donations of mostly Bitcoin (BTC) and Ethereum (ETH) from around the globe have been and continue to be vital in aiding its defense.
The announcement was made Wednesday March 16th, 2022 by Ukraine’s Ministry of Digital Transformation. Under the law crypto exchanges and companies handling digital assets will need to register with the government in order to be in compliance with the new law. Band will also be able to open accounts for crypto companies. The Ministry of Digital Transformation also added that the Ministry of Finance was currently working on adjusting the countries tax codes to accommodate the new legal framework for digital assets or crypto.
The Ministry of Digital Transformation stated .“The signing of this law by the president is another important step towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine.”
Crypto and Ukraine’s Fight Against The Russian Invasion
Cryptocurrency has received an increase in attention recently since the Russian invasion into Ukraine. There have been many experts debating whether Russia has been able to evade any sanctions applied to them from the West via the use of cryptocurrency and whether that should warrant additional regulations for the space. There have been reports of some Russian oligarchs possibly avoiding penalty as well by turning to digital assets.
In addition, cryptocurrency has been praised by many including the Ukraine government who has recently setup a website to centralize its crypto-based fundraising efforts. This site has been able to accumulate over $54 million of mostly Bitcoin and Ethereum as of March 11th, 2022. According to Alex Bornyakov, Ukraine’s deputy Minister of Digital Transformation almost $100 million US dollars worth of crypto has been sent to support the Ukraine in the past several weeks alone.
Some Ukrainians are also turning to crypto as an alternative to Ukrainian financial institutions or banks, which are limiting people’s access to bank accounts and foreign currency. In a scenario where governments are in chaos, it’s difficult to rely on traditional banks, and there’s fear of surveillance. So a relatively anonymous system where no government is involved is appealing.