Adopting the bill in the 2nd reading, the Ukrainian Parliamentarians has efficiently launched the process of legalization of the national crypto-asset market, which had previously operated outside the law due to the lack of appropriate regulative mechanisms. By recognizing cryptocoins, crypto exchanges and other VASPs are eligible to form business relationships with banking institutions. Generally, as informed by authorities, legalized crypto trading in Ukraine has many advantages for a local digital economy sphere.
Free access to financial services could encourage foreign cryptofirms to establish their presence in the Ukrainian market, which could contribute to transforming the country into an extensive hub for cryptocoins and new technologies. Accordingly, shortly foreign and Ukrainian services regarding the turnover of cryptocoins, particularly, crypto exchanges, will be capable of operating in the jurisdiction.
Indeed, the Ukrainian market is currently well-established and large if estimated on a worldwide scale. Development of the crypto sector is among the Ukrainian government’s first priorities, as the primary purpose of such movement is to establish workable regulative and tax frameworks for carrying out crypto services in the country and staying compliant with the norms of EU requirements in this field.
Foreign exchanges legally entering the Ukrainian market, could also mean a lot for the creation of an attractive environment for flows of foreign investments into the country’s digital economy. With strict regulative regulations entering force in some other legal systems, Ukraine’s recognition of digital assets could drive blockchain-based businesses to enter its market.
Providers of services related to cryptoassets seeking to capture a share of the market under the new regulatory paradigm will be required to submit data about their ownership structures. Accordingly, only “fit-and-proper” operators with good business behavior will be allowed to open their organizations in the Ukrainian market.
In August 2022, the Ukrainian Security Service closed a net of illicit businesses considered to be engaged in illicit financial activities since 2021. These organizations were directing money from restricted Russian payment processors.
The Ukrainian government plans to lay down monitoring protocols for such service providers to show compliance with AML policies. The NBU has also demonstrated its commitment to establishing fair crypto rules in the country. With the Parliament bringing cryptocoins into legal oversight, the NBU stated it would control and assess the risks related to the fast-paced adoption of cryptocoins in the country with a particular emphasis on stablecoins which have become a subject of substantial regulative focus in many countries, including the USA.
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