Two bills to provide legal frameworks for cryptocurrencies including bitcoin have now been submitted to the Ukrainian parliament. The latest one proposes recognizing them as financial assets. It also defines cryptocurrency derivatives, as well as proposes simplifying taxation and reducing electricity tariffs for mining activities.
Two Bills Submitted to Parliament
Following the first bill on cryptocurrency which was submitted on October 6, the second bill has been submitted to the Ukrainian parliament. Entitled “On the stimulation of the market of cryptocurrencies and their derivatives in Ukraine,” Bill No. 7183-1 was submitted last week.
In the new bill, the head of the Parliamentary Committee on Financial Policy and Banking, Serhiy Rybalka, proposes to recognize cryptocurrency as a “financial asset,” The Financial Club reported. “It makes no sense to reinvent the wheel and invent new rules for it. The most effective model is the adaptation of cryptocurrencies to the already existing legislation,” the publication quoted him saying. “That is why we propose to recognize cryptocurrency as a financial asset.”
Ain publication elaborated:
According to this document, state bodies are responsible for monitoring cryptocurrency exchanges. Cryptocurrency exchanges will be required to obtain a license for their activities. They have the right to open accounts in cryptocurrency both for citizens of Ukraine and for non-residents.
Taxation and Other Terms
The second draft law also calls for “reduced tariffs for electricity and the simplest taxation” in order to “stimulate the ‘extraction’ and turnover of cryptocurrencies,” The Financial Club detailed. Rybalka further “proposes not to tax cryptocurrency investments,” the publication added, noting that the bill proposes a 2% fee when cryptocurrencies are exchanged for hryvnia.
In addition, the bill calls for the National Financial Services Commission to be the primary regulator of cryptocurrencies. In the first bill, it was proposed for the National Bank of Ukraine (NBU) to act as the regulator of the crypto market.
While the second bill contains the definition of cryptocurrency derivatives, neither bill contains references to initial coin offerings (ICOs), explained Orlovsky Maxim, Head of Bitcoin Foundation Ukraine. Furthermore, the first draft law does not mention AML and KYC procedures for cryptocurrency operations, while the second one suggests for them to be determined by the central financial regulator as part of their licensing requirements, he added.
Cryptocurrencies Not Prohibited
Even though there is not yet a regulatory framework for cryptocurrencies in Ukraine, cryptocurrencies including bitcoin are not prohibited by law. The Ukrainian finance minister Oleksandr Danylyuk wrote on his Facebook page on Monday that his ministry is working with the NBU and other financial regulators to formulate the right regulation for them. He wrote:
There are many open issues and in Ukraine the status of cryptography is not defined by law, but this does not mean that cryptocurrency is prohibited. Ukraine should monitor world trends and not miss a chance to use new technologies and innovations in the financial sector.