With tensions rising on its border with Russia, Ukraine may not want to risk missing out. Given Russia’s recent proposal on cryptocurrencies, Ukraine cannot afford to miss out. Cryptocurrencies have played an important role in funding the Ukrainian border war.
Ukraine Gives Legal Status to Virtual Assets
According to an announcement on February 17, the Ukrainian government passed a law legalizing Bitcoin and other cryptocurrencies.
The laws, adopted by a majority, give legal status to virtual assets. The law not only grants users the right to operate cryptocurrencies but also clarifies the rights and obligations of all market participants.
In early October, Ukrainian President Volodymyr Zelenskyy vetoed a bill and returned it for revision. The President believes that the proposed law needs to be amended, but has not yet created the full legal mechanism needed for its implementation, nor does it meet the constitutional requirements for the definition of law. Revised version accepted on February 17, 2022.
The Verkhovna Rada of Ukraine passed two IT-related laws, the first (No. 3637) authorizing virtual assets and the second (No. 2655) establishing the legal framework for the provision and use of cloud services in government organizations.
The People’s Representative passed the Virtual Assets Act on the President’s proposal, and the National Securities Commission was appointed as the regulator. She got 272 votes and needed only 226.
Mykhailo Fedorov Believes Crypto will Reduce the Risk of Corruption in Procurement of Equipment
The National Securities and Stock Market Commission and the National Bank are responsible for regulating the virtual asset market. According to Mykhailo Fedorov, head of the Ministry of Digital Development, the adopted law will allow Ukraine to open a legal market for virtual assets.
In the second reading, the Verkhovna Rada also approved the cloud services law as a whole. According to the justification, the purpose of the law is to create the conditions for the processing and protection of data when using cloud computing technologies and the provision of cloud services and to define specific details of the use of cloud services by the public authorities and more efficient use of public resources through the introduction of new technologies.
Mykhailo Fedorov stated that cloud technology will reduce the risk of corruption in the procurement of equipment, significantly reduce household spending, and most importantly, accelerate the adoption of innovation in government agencies.
According to him, the new law will accelerate the entry of the world’s leading cloud service providers – Microsoft, AWS and Google Cloud – into Ukraine and encourage the construction of data centres.
The Ministry of Digital Development has previously announced plans to expand the “virtual assets” market. According to the authorities of the Ministry of Digital Development, this will strengthen Ukraine’s position as an innovative digital country in the financial sector in Eastern Europe.
Blockchain analysis firm Elliptic has revealed that Ukrainians are increasingly using cryptocurrency funds in response to Russian pressure. Bitcoin has become a popular alternative funding option, allowing international donors to avoid financial institutions that refuse to pay these organizations.