NEWS

Ukraine is the 5th Country in the world to adopt Cryptocurrency: Information We Need to Know

Photo by Eugene on Unsplash

1. New Development on Cryptocurrency in Ukraine

Ukraine, one of the most active crypto nations in the world. Cryptocurrency has been legalised in Ukraine as its parliament on September 8, 2021, passed a law that will also regulate virtual assets. In the process, it became the fifth country in the world to pass a law legalising and regulating cryptocurrency. Governments around the world are slowly coming to terms with the importance, future prospects, and scope of demand for cryptocurrency. Prior to this, there were no set laws to define the legality or value of the cryptocurrency in Ukraine.

The countries to legalise cryptocurrencies- USA, EU, Australia, El Salvador.

According to the country’s Minister of Digital Transformation Mykhailo Fedorov, the daily turnover of virtual assets in the country is $37,000 (roughly Rs. 27 lakhs) and it is very popular among the residents of the country. Now, the system will become more transparent with the existence of this law and a greater number of Ukrainians would come forward to invest in the market.

Earlier this week, El Salvador became the first country to adopt Bitcoin as legal tender.

  • In a nearly unanimous vote, the Ukrainian Parliament adopted a law that legalizes and regulates cryptocurrency.
  • The bill was set in motion in 2020 – and now heads to the desk of President Volodymyr Zelenskyy.
  • The Verkhovna Rada, Ukraine’s unicameral parliament, voted to pass the measure and send it to President Volodymyr Zelensky for final approval.

2. Impact of Cryptocurrencies

Cryptocurrencies have been neither legal nor forbidden in Ukraine because there were no laws that defined them. Ukrainians could buy and exchange virtual currencies, but local courts couldn’t protect them if something went wrong. Although virtual assets are now legitimate in Ukraine, Ukrainians cannot use them as a means of payment or exchange for goods or services — only the official national currency, the hryvnia, has this power. However, Ukrainians can own, exchange and trade cryptocurrencies using local or foreign exchange platforms registered in Ukraine.

3. Companies dealing with Cryptocurrencies

The law on virtual assets allows crypto businesses to work officially in Ukraine and pay taxes here. To register a crypto business, a company needs to prove that it is transparent and has an excellent reputation. The permission to start a business costs over $3,100. To prevent profit laundering and financial terrorism, crypto businesses have to declare their activity to the state.

4. Disclosure of Cryptocurrencies by Civil Servants

In March, the National Anti-Corruption Committee published instructions mandating how civil servants in Ukraine detail how much crypto they own in their annual property declarations.

5. What is Cryptocurrency?

A cryptocurrency is a digital currency that can be used to buy goods and services but uses an online ledger with strong cryptography to secure online transactions. 

A cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. You’ll need to exchange real currency for the cryptocurrency to access the good or service.

6. Status in US, China & India

Cryptocurrencies work using a technology called a blockchain. Blockchain is a decentralized technology spread across many computers that manage and records transactions.  There’s no question that they’re legal in the United States, though China has essentially banned their use, and ultimately whether they’re legal depends on each individual country. Cryptocurrencies are not mentioned in the Indian Income Tax Act, and no rules have been established. Since the Reserve Bank of India (RBI) has not yet granted bitcoin or any other cryptocurrency’s legal tender status in India, no specific rules govern how these cryptocurrencies should be taxed. This doesn’t mean you can get away with not paying taxes on your profits. Profits from bitcoin sales can be taxed as business income if traded frequently or as capital gains if held for investment purposes.

Photo by Eugene on Unsplash

Print Friendly, PDF & Email