Ukraine is moving closer to legalizing cryptocurrency, with a new bill expected to be finalized by the first quarter of 2025.
Danylo Hetmantsev, head of the Ukrainian Parliament’s Committee on Finance, Tax, and Customs Policy, confirmed that the draft law is nearly ready for its first reading, according to Pravda.
Hetmantsev stated that the law is being developed in collaboration with the National Bank of Ukraine and the International Monetary Fund
The proposed law will regulate cryptocurrency transactions and implement a taxation model similar to that of securities. Profits from crypto assets will be taxed when they are converted into traditional currency. Hetmantsev emphasized that Ukraine is adopting a cautious approach regarding tax exemptions for cryptocurrencies, citing concerns over potential tax evasion in traditional markets.
The government has avoided including tax exemptions in the draft to prevent misuse, with consultations involving European experts and the IMF helping shape the cautious stance.
Taxation on crypto transactions will mirror the tax treatment of securities, ensuring that profits are taxed only when assets are converted into fiat currencies.
Ukraine’s dance with crypto
This move toward crypto legalization in Ukraine follows its growing interest in digital assets. The country has previously adopted blockchain technology for some state functions.
Ukraine received millions in crypto donations during the full-scale invasion that Russia started in Ukraine. The donations were used for various humanitarian and military purposes, showcasing the advantages of borderless and decentralized funds during a crisis.
Back in late 2023, Ukraine implemented FATF crypto standards to meet international compliance and avoid the grey list.
While the legal framework for cryptocurrency in Ukraine is nearly complete, the first reading of the bill is expected to take place after the New Year.
