Ukrainian Financial Regulator Does Not Support Current Bills on Cryptocurrency Regulation

Published on 08 Nov. 2017
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During the last month, two bill drafts about cryptocurrency regulation were introduced in the Verkhovna Rada of Ukraine, namely, the bills “On Circulation of Cryptocurrencies in Ukraine” and “On Stimulation of Cryptocurrencies and Their Derivatives in Ukraine.

After the consideration of the bills in the relevant committees, National Securities and Stock Market Commission, a regulatory body in Ukraine, has mentioned via its press service that it cannot support these initiatives at the moment.

The reason for denial, according to the regulator’s feedback, is that the bill drafts require refinement in several paragraphs, namely:

1. The use of term “cryptocurrency” in the legislation is unjustified since the notion is inherently the result of financial engineering and is not a “currency.” Thereby, one considers using the term “crypto unit” more expedient.  

2. One should mention that the legal status of “cryptocurrencies” differs in the developed countries. However, cryptocurrency is usually considered as a financial instrument, investment assets, less often as goods. It is precisely the definition one considers the most acceptable.

3. We regard as inexpedient the heavy regulation, offered by the bill drafts. On the current stage of global ambiguity in the cryptocurrency market regulation, the control should be assured by the introduction of general legal “legalization” of a certain crypto unit. The financial regulator should make a decision based on the type and number of parties in the operations with the certain crypto unit, on its accounting system, etc.

As a result, the status of Bitcoin and cryptocurrencies in Ukraine is remaining under the label “undefined” so far. However, it will not prevent the functioning of cryptocurrencies on the territory of the country. Although, the Verkhovna Rada can pass one of the bills amid the recommendations of the Commission.

It should be reminded that the research has been published recently on who owns Bitcoin among the Ukrainian politicians. Besides, on the beginning of November, it became known that the elections in Ukraine may be carried out with the help of blockchain technologies.

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