Ukraine's Parliament to Vote on Landmark Crypto Legalization Bill Next Week

Ukraine Edges Closer to Crypto Legalization: Parliament to Tackle Landmark Bill

The Ukrainian parliament is poised to make a significant leap forward in the digital asset landscape next week. On August 19th, lawmakers are set to begin their first reading of draft law №10225-д, a pivotal piece of legislation aimed at formalizing the virtual assets market within the country. This move signals a bold step towards regulatory clarity and integration of cryptocurrencies into the national financial framework.

A Clear Path Forward: Committee Approval and Regulatory Framework

The proposed bill has already navigated a crucial hurdle, receiving a recommendation for adoption as a foundation for further work from the relevant parliamentary committee. This endorsement sets the stage for a more structured approach to the burgeoning crypto sphere. Furthermore, a timeline has been established, with a clear directive to finalize the distribution of powers among regulatory bodies by October. This aligns with the European Union's landmark MiCA (Markets in Crypto-Assets) directive, promising a harmonized approach to digital asset regulation.

Defining the Digital Frontier: Key Provisions of the Bill

At its core, the legislation defines a virtual asset as a unique form of digital property, underpinned by blockchain technology. It's crucial to note that these assets will not be recognized as legal tender or official payment instruments for now. However, the bill thoughtfully proposes equating electronic money tokens, commonly known as stablecoins, with electronic money as defined by Ukraine's Law "On Payment Services." This establishes a bridge, acknowledging their growing role in transactions.

Categorization and Ownership: A Structured Approach

To bring order to the diverse world of digital assets, the draft law introduces a three-tiered classification system. This includes asset-backed tokens, electronic money tokens (stablecoins), and a broader category of "other virtual assets," the specifics of which will be determined by the designated regulator. Ownership rights are set to be robustly protected, verifiable through cryptographic keys, with a presumption of lawful possession. This is akin to having a digital deed, secured by advanced cryptography, ensuring verifiable ownership.

Transparency and Protection: Safeguarding Investors

For public offerings of virtual assets, a mandatory "white paper" will be required. This document is designed to be a comprehensive and truthful disclosure of all pertinent information about the asset and its associated risks, much like a prospectus for traditional securities. Service providers in the cryptocurrency space will need to obtain authorization and implement stringent measures to safeguard their clients' assets and data. The bill also incorporates robust anti-manipulation provisions, targeting insider trading and the illicit dissemination of sensitive information, aiming to foster a more secure and trustworthy market environment.

A Welcoming Tax Regime: Incentivizing Growth

Recognizing the need to encourage adoption and investment, the proposed tax framework offers a distinct regime for cryptocurrency-related income. The emphasis is on taxing profits rather than gross revenue, with several scenarios providing tax exemptions. A particularly appealing provision offers a preferential Personal Income Tax (PIT) rate of 5% for assets acquired before the law's enactment, applicable in 2026. This forward-thinking approach aims to ease the transition and attract both domestic and international players to Ukraine's emerging digital economy.