Ukraine Law Allows New Use of Virtual Assets for Payments

Ukrainian legislature, Verkhovna Rada, recently approved a new set of amendments that clarify the legal status of virtual currencies. The legislators are trying to adopt FATF standards into national laws.

More clarity for cryptocurrencies

The Financial Action Task Force (FATF) is eyeing transparent regulation for digital currencies, which are often called the wild west of the financial world. The group suggests the creation of standard practices and regulations for digital currencies across the globe. Members of the organization also agreed to assess crypto regulations and monitor these rules. Ukrainian regulators are looking to create similar standards for the industry.

The new draft law aims to prevent the legalization of proceeds of financial crime and terrorism financing. It also seeks to stop financial routes that could boost the weapons of mass destruction. The Rada legislators approved the bill with a sizeable majority. It incorporates the use of virtual assets. According to the law, virtual assets are described as any property that expresses value digitally and can easily be traded or transferred. They also acknowledged that virtual assets could be used for either payment purposes or for making investments.

What does the law provide?

According to crypto media outlet Forklog, the law introduces a new term- “provider of services related to the transfer, exchange, and storage of virtual assets.” The law suggests that both corporate entities and private citizens will be allowed to offer services that accept digital currencies. However, the level of financial monitoring on the system will depend entirely on the destination and amount of the transaction.

The Ministry of Digital Transformation has been tasked to regulate digital currencies in the country. It will focus on verifying anti-money laundering compliance for all crypto transactions in the country. The legislation is prepared by Blockchain4Ukraine, a multi-partisan group in the parliament that promotes the use of distributed ledger technology. It is working alongside the Better Regulation Delivery Office (BRDO), EU-funded expertise and analytical center.

The first reading of the draft law took place on November 1 and the second reading happened last Friday. The adoption of cryptocurrency laws is a part of Ukraine’s commitments to the EU. Ukrinform reported that the regulation could help the country get a €500 million financial assistance from the Union. Traditionally, laws take at least three readings before adoption in Ukraine. The Rada has categorized the new crypto bill as “adopted” and “being prepared for signing” by the President.