• Ukraine is set to roll out new EU-inspired crypto regulations by 2021.
• This follows adoption of the MiCA framework into EU law in 2022.
• The central bank will have the final say on the bill and it will tax gains from crypto-to-fiat sales only.
Ukrainian Crypto Regulations
Ukraine is planning to introduce new EU-inspired crypto regulations before the end of 2021. These plans follow the adoption of the Markets in Crypto Assets (MiCA) framework into EU law in 2022. A “working group” consisting of the National Commission on Securities and Stock Market, Ministry of Digital Finance, National Bank of Ukraine, MPs and advisors from international financial firms such as EY (Ernst & Young) and USAID Financial Sector Reform are currently working on a plan for these regulations. The central bank will have the final say on this bill which will be more thorough than previous crypto laws passed in 2021.
The new legislation is expected to comprehensively spell out legal terms for cryptoassets as well as focus on taxation related matters. It is likely that traders will be obliged to pay capital gains tax on crypto-to-fiat sales only while crypto-to-crypto trades won’t be subject to any form of taxation.
A “working group” comprising of several market players, law enforcement agencies, international financial firms and other advisors has been formed to draw up these regulations which should be submitted to parliament in their summer session with an expected approval before 2021 ends.
EU MiCA Framework
The MiCA framework adopted into EU law seeks to provide a unified approach towards regulating digital assets across Europe that meets international standards and allows users access services across borders within Europe easily. It also seeks to ensure greater oversight and compliance while protecting investors’ rights through investor protection rules such as disclosure requirements, trading rules or measures against market abuse or frauds.
Crypto Usage In Emerging Economies
According to a UN report, cryptocurrency ownership is highest in emerging economies with Ukraine, Russia, Venezuela topping the list due its ease of use for payments without having access to traditional banking systems or payment infrastructures that are common in developed countries .