Consider Ukraine cryptofriendly! In an official statement, the Ukranian government has confirmed its plans to establish regulatory frameworks to legalize crypto in the region.
The Economic Development and Trade Ministry in Ukraine released a new policy which will oversee various cryptocurrency-related sectors which will be put into full effect by the end of 2021. This was done as part of an initiative due to the rising interest of cryptocurrency and the emergence of blockchain technology.
In 2018 and 2019, Ukraine will integrate regulatory frameworks to govern the cryptocurrency exchange market. Crypto trading in the Ukraine will require Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.
By 2020, Ukraine will start to monitor cryptocurrency mining industries, smart contract protocols, and taxation. The government plans on pushing recognizing cryptocurrencies as an asset class and an established industry, which is a boon for cryptocurrency, especially given its low total marketcap.
Denis Zarytsky, a researcher, stated that the official document released by the Ukrainian government outlined a potential tax liability for cryptoassets – the figure in the document is 5%, which is substantially lower than other regions such as the US, France, and the UK.
Regions that recognize cryptocurrencies as properties, not assets, impose higher taxes, such as Japan and Australia. In 2018, the two countries removed double taxation on cryptocurrency.
“They aim to determine guidelines for token classification. Additionally, they will be touching upon issues that relate to smart contracts and cryptocurrency mining. Therefore, this work will be ongoing. There will be two separate stages to the implementation of this new state policy. The hope is to have this policy in full effect by 2021. In addition to the new state policy, the government notably has brought in a new taxation bill. This outlines a new 5% tax that is payable by entities and individuals with cryptocurrency holdings.”
Yuriy Derevyanko, a member of the anti-corruption Movement of New Forces and a legislator in Ukraine, called for the complete elimination of taxes on crypto by the end of 2020. The US’s Ron Paul has advocated for no taxes on crypto to avoid a recession – this seems to be a common theme from those calling for no taxes on cryptocurrencies.
Derevyanko firmly stated that crypto has the potential to become one of the biggest markets in Ukraine and will undoubtedly be a driving force for the country’s economy, saying: “I believe we need to impose a moratorium on taxation of [the crypto] area for the next 10 years. We have to regulate and legalize this segment, which will become an engine for a new economy.”
Currently, both the opposing and the ruling party of Ukraine remain positive on the long-term growth of the cryptocurrency sector and blockchain technology. This bodes well for the Ukraine, as there doesn’t seem to be a major blockchain critic bloc in the Ukrainian government.
This positivity from the government of the Ukraine could mean that blockchain technology, adoption, and recognition could lead to legalize cryptocurrencies within the next 3 years.
Governments are slowly starting to recognize the power and the potential of cryptocurrency. Ukraine is just starting, however, there are other countries that have been on the path towards becoming bastions of cryptotechnology, such as Singapore, South Korea, Japan, Switzerland, the UK, and France. They’ve all made significant progress in establishing regulation and infrastructure to facilitate the ever-increasing demand towards the asset class.
While this move is bullish and certainly a positive step forward for Ukraine, 3 years is a very long time in Cryptocurrency. Some have expressed that 3 years could allow other emerging cryptocurrency markets to gain a foothold, even in the Ukraine.
What do you think? We know that financial institutions are finally starting to wake up and classify Bitcoin as an asset class. We also know that more financial players will start entering the market, or are anxiously waiting to do so. Are you bullish? What do you think? Let us know on our Facebook page!