Ukraine, now serious about crypto regulation, is setting up a special working group to oversee the completion of the necessary framework. Dedicated legislation has been making its way through parliament since October. The National Bank is considering plans to emit “e-hryvnias”, while the justice minister says bitcoin is a fact and calls for its legalization.
Crypto Matters in Ukraine’s Security
Cryptocurrencies have been addressed as a major topic of discussion during a meeting of the National Cybersecurity Coordination Center on Thursday. Participants took a closer look at what they referred as “uncontrolled circulation of cryptocurrencies on the territory of Ukraine”, Froklog reported. According to representatives of Ukraine’s National Bank, Security Service and National Police – the absence of control and the anonymity of transactions create conditions for laundering money acquired through criminal activities. Unsurprisingly, Ukrainian officials also noted the possible use of cryptos to purchase illicit goods, like drugs and weapons. The “black list” would’ve been incomplete if financing terrorism was not mentioned, and so it was.
The development of the cryptocurrency market cannot be left unattended
This is what Oleksandr Turchynov, Secretary of the National Security Council, said during the meeting of the cybersecurity body. In his words, when the government is distancing itself from the matter, in a legal vacuum, threats arise for the economy and security of the state. He emphasized the absence of regulatory framework and subordinate statutory instruments. With the fast development of cryptocurrencies around the world, Ukraine cannot leave this question without the due attention, Turchynov stressed.
Following his comments, the NCCC decided to set up a working group and charge it with finalizing all legal preparations to adopt crypto regulation. The National Bank, the Ministry of Finance and the Security Service will be represented in the party, along with other supervisory and law enforcement institutions. They must determine how the cryptocurrency market will be functioning and how the mechanism to monitor transactions and identities will be implemented. The working group will also be dealing with crypto-taxation.
The government experts will develop a mechanism to access data collected by the cryptocurrency exchanges. They will be obliged to keep transaction records under the requirements currently applicable to other financial institutions. Crypto companies will have to reveal information about their customers when a “motivated request” is submitted by the authorities.
Bitcoin to Stay, Hence – Must Be Legalized
The cybersecurity meeting was held a few days after a statement by the Minister of Justice who said that “Bitcoin must be brought into the legal field”. In an interview for Segodnya on Sunday, Pavel Petrenko noted that cryptocurrency transactions would be taking place, one way or the other. That’s why, he thinks, it would be better if bitcoin gets regulated right away.
“Bitcoin already forms a sizable portion of market transactions, including those of goods and services. That’s a fact!”, the government official stated, referring to the matter as Fait accompli. He added that every state and international organization must respond to this “transnational public phenomenon. Otherwise, these relations will be left outside the law. Regardless, they will continue to exist anyway”, Petrenko added.
Ukraine’s justice minister also thinks that his country should work with the EU and the US to provide a unified legal definition of bitcoin. The high-ranking Kiev official reiterated his ministry’s readiness to join other Ukrainian institutions that had been “actively dealing” with the legal issues. Financial regulators in the country have already supported parliamentary initiatives to officially regulate the status of cryptocurrencies.
Two bills and one amendment have been advancing through parliamentary commissions since their introduction to the Rada last October. No progress has been reported this year. One of the drafts aims to encompass the circulation of digital coins in Ukraine. Another focuses on “stimulating the market of cryptocurrencies and their derivatives”. Tweaks in the Tax Code should address cryptocurrency income, with unconfirmed reports of possible exemptions and incentives for miners. A parliamentary report explores the implications of new legislation on the state budget.
Hryvnia – “Tak”, Crypto – “Ni”
Another announcement from the cybersecurity meeting in Kiev read that the National Bank is “considering the expediency of issuing cryptocurrency”. Shortly after Ukraine’s “Natsbank” corrected that slip of the tongue.
In a press-release, posted on social media, the central financial authority said clearly that no plans were in place to issue a new crypto. However, the bank is still mulling over the possibility to emit a so called “e-hryvnia”, or the nation’s fiat currency in electronic/digital form. This could be done within the framework of the “Cashless Economy” project aimed at speeding up bank operations and minimizing losses in money transfers.
The National Bank is studying modern innovation technologies and looking into a broad spectrum of possible applications in perspective…
Central banks… What can you do about it?
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Author: Lubomir Tassev