Ukraine's roadmap of crypto adoption

[kryptqnick]

I stumbled upon this article today, talking about Ukraine's roadmap of intended regulations of the crypto industry in Ukraine. Perhaps it was discussed earlier, and I've missed it, but I didn't find a relevant topic, so I'm creating one. Right now, cryptos are in a gray area in Ukraine: lots of people use it, no taxes are paid, and the authorities are fine with it all, unless someone's doing something clearly illegal, such as mining cryptos and not paying the electricity bills. We've had several draft laws before which attempted to regulate the crypto industry, but they all failed to gain enough support in the Parliament. However, I think this time is different because the Ministry of digital transformation is involved.
A local article, and it looks pretty good to me, with the deputy minister saying the following:
"I'm sure that with the community's efforts, in regard to development of the area of virtual assets, Ukraine will not only be able to compete on the global crypto market, but also become the leading example for other countries."
Of course, it's too early to say for sure, as there's no legislation that passed on the matter yet, but what are your thoughts on this?

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[mycryptocoin]

it is similar to the fact that the Japanese Financial Regulatory Authority has approved Coinbase to operate in Japan. but this will be a long war because of their exuberance

[Lucius]

The last interesting news from Ukraine that I remember is the one about local politicians who allegedly own as much as 46 351 BTC which is really impressive if true - > 652 Ukrainian officials declare holding a total of 46,351 BTC

It is quite logical that any government that will not ban cryptocurrencies regulates this area, because the money that can be collected from taxes should not be neglected. The minister obviously has big plans, although it does not seem realistic to me that Ukraine can become one of the top 10 countries in terms of cryptocurrency integration in the next 3 years.

I see the first problem in the current state of the state itself to defend the sovereignty of its territory, which stands as a great sign of instability above all, and the second problem is that the minister does not have a life term, and the question is what will happen if the ruling party changes in the next parliamentary elections.

It should also be noted that nowhere in the article Bitcoin or any other coin is explicitly mentioned.

[amishmanish]

The more these "initiatives" by governments are coming forth, the more I realize that the governments are not going to do anything that is a positive for bitcoin, either from the regulatory perspective or in expanding the usage. El Salvador and President Nayib have proven to be a rare exception till now. The rest of the times, the noises made by governments are a result of self-serving politicians with a stake in bitcoin, like in this case.

The main players are private institutions who are taking an interest. The B Word was a good initiative although it could have done a bit more to set the record straight between bitcoin and meme-coins. Still, Elon's statement about "Government being the biggest corporation with a monopoly and violence" was a good example of the bitcoin ethos driving people's thoughts these days.

I think more than these isolated regulations, governments will have to slowly adjust around the economy and development stack that is evolving out of bitcoin, much like what happened with the Internet. That is the best path forward and any of these news about regulation by governments or adoption by banks (Futures, ETF et al) is just inconsequential in the bigger scheme of things.

[lovesmayfamilis]

As long as Ukraine is ruled by America, there is no point in hoping for any positive changes. Each decision is not discussed by members of the Ukrainian government, but always agreed with the United States. Therefore, the cryptocurrency will live only in the wallets of the oligarchs, and the common people will have to stupidly look for other ways out so as not to lose their assets due to various kinds of innovations.

[rikybrosh]

There are many advantages of become early bitcoin and other cryptocurrencies adopters. It is good to start it now there are still many countries which didn't accept bitcoin. I think if Ukraine adopt cryptocurrency now then it will become one of countries who have big impact on bitcoin which mean their economy will be better. If their citizens have atleast $50 in BTC to hold then we will see in the next 2 years their citizens purchasing power will be increase significantly. That's my opinion.

[pakhitheboss]

If they wanted to regulate cryptocurrency they would have done it by now. This is another example of fiddling with the minds of the crypto community in Ukraine. I understand it is not an easy task but it is not that difficult too. There are countries that have either regulated or have accepted Bitcoin as a legal tender they never shouted that they will do something in the future.

Do not believe the government they say something in public and do something else in private. As per OP at the moment nothing bad is happening to the community in Ukraine when the government implements regulations sometimes in the near future nothing worse will happen.

[hatshepsut93]

Government and business representatives have produced a roadmap to transform Ukraine into a leader in cryptocurrency integration.

This really doesn't mean much. There are always some people from the government who propose things, but they need to convince the majority of their colleagues to support it, which is the tricky part.

Right now, cryptos are in a gray area in Ukraine: lots of people use it, no taxes are paid, and the authorities are fine with it all, unless someone's doing something clearly illegal, such as mining cryptos and not paying the electricity bills. We've had several draft laws before which attempted to regulate the crypto industry, but they all failed to gain enough support in the Parliament. However, I think this time is different because the Ministry of digital transformation is involved.

Not true, there was one specific crypto law succesfully voted, but it was adopted in first edition and it doesn't have much power now. It's a work in progress. Ukraine also adopted some FATF regulation that also touches crypto. And theoretically people in Ukraine should be paying taxes on their mining or trading profits, and I'm sure some do, but Ukraine's private citizens in general don't hurry to pay taxes, and tax bodies are mostly interested in bigger fish, so it is true that a lot of people don't pay taxes on their crypto.

[NeuroticFish]

I'm sure that with the community's efforts, in regard to development of the area of virtual assets, Ukraine will not only be able to compete on the global crypto market, but also become the leading example for other countries.

I find this as a politician-type announcement that rises your hopes, but doesn't actually tell anything.
He doesn't tell what they want to do good, he doesn't tell what will be that leading thing they'll do, no time frame, nothing.
For now it would be safer to have no expectations at all from that announcement.

[WePiggy]

There are a lot of talented blockchain developers in Russia and the Eastern Europe. Favourable conditions will attract the right people, and the right companies. They have seen what Malta has done and are probably looking to do the same. Also their timeline gives them enough time to see what happens in El Salvador before they commit to anything bigger

[kryptqnick]

The last interesting news from Ukraine that I remember is the one about local politicians who allegedly own as much as 46 351 BTC which is really impressive if true - > 652 Ukrainian officials declare holding a total of 46,351 BTC

It is quite logical that any government that will not ban cryptocurrencies regulates this area, because the money that can be collected from taxes should not be neglected. The minister obviously has big plans, although it does not seem realistic to me that Ukraine can become one of the top 10 countries in terms of cryptocurrency integration in the next 3 years.

I see the first problem in the current state of the state itself to defend the sovereignty of its territory, which stands as a great sign of instability above all, and the second problem is that the minister does not have a life term, and the question is what will happen if the ruling party changes in the next parliamentary elections.

It should also be noted that nowhere in the article Bitcoin or any other coin is explicitly mentioned.

It's indeed true that our politicians hodl a lot of BTC. The reason for that is that this way you don't have to pay taxes, and you don't have to explain where you got all that money (you simply say you're an early BTC investor, and that's it). As for top-10, it might be too ambitious, but cryptos seem already quite popular here, and the government is very interested in trying out new ways of boosting the economy, especially when it comes to adopting some new technologies. Did you know that Ukraine's the first country in the world where digital passports in a governmental smartphone application are of the same legal force as the paper versions? As for Bitcoin not being mentioned in the article, it's just a very small press release, but Bitcoin is mentioned multiple times in the full report from the meetings.

If they wanted to regulate cryptocurrency they would have done it by now.

There have been multiple attempts, but different stakeholders held different views on how to treat cryptocurrencies, so no draft law received enough support. I do believe that this time they might pull this off because both the parliament and the government (represented by the ministry) are involved. That being said, the regulated crypto space might indeed be worse for everyday users than a non-regulated one, even if the regulations are not restrictive.

Not true, there was one specific crypto law succesfully voted, but it was adopted in first edition and it doesn't have much power now. It's a work in progress. Ukraine also adopted some FATF regulation that also touches crypto. And theoretically people in Ukraine should be paying taxes on their mining or trading profits, and I'm sure some do, but Ukraine's private citizens in general don't hurry to pay taxes, and tax bodies are mostly interested in bigger fish, so it is true that a lot of people don't pay taxes on their crypto.

I know about the first edition, but it's not the law yet, and might never become one, which is why I phrased it that way in the post. As for FATF regulation, I've missed this one (it was only a year ago), but it only applies to limited cases, so it's not a full regulatory framework.

I'm sure that with the community's efforts, in regard to development of the area of virtual assets, Ukraine will not only be able to compete on the global crypto market, but also become the leading example for other countries.

I find this as a politician-type announcement that rises your hopes, but doesn't actually tell anything.
He doesn't tell what they want to do good, he doesn't tell what will be that leading thing they'll do, no time frame, nothing.
For now it would be safer to have no expectations at all from that announcement.

There are detailed time frames in the full report in Ukrainian. They intend to pass the law on virtual assets in September 2021, work on taxation and KYC policies in January 2022, make it possible to officially exchange cryptos for fiat and vice versa + establish the school program on virtual assets by July 2022, and open a master's program on DeFi in May 2024 (among many other things).

[buwaytress]

I do recall a discussion perhaps a couple of montha ago about the reason why draft laws or suggestions haven't even got to the stage of proposal forwarding for voting, and it's because it'd be a convenient way for politicians there to just suddenly declare their wealth by saying they've been early adopters and buying Bitcoin since whenever. Tax-free so no questions asked?

See this one: Ukrainian civil servants (read as politicians) own $2.6 billion in Bitcoin.

[hatshepsut93]

I do recall a discussion perhaps a couple of montha ago about the reason why draft laws or suggestions haven't even got to the stage of proposal forwarding for voting, and it's because it'd be a convenient way for politicians there to just suddenly declare their wealth by saying they've been early adopters and buying Bitcoin since whenever. Tax-free so no questions asked?

I thin the actual reason why regulations aren't implemented yet is that politicians don't view crypto as important enough, so they don't spend enough time to get the laws reviewed and adopted. If it was something that represented a significant portion of the economy, it would be regulated in no time.

See this one: Ukrainian civil servants (read as politicians) own $2.6 billion in Bitcoin.

$2.6 billion is too high, there's probably some miscommunications and mistakes.

[bittraffic]

I do recall a discussion perhaps a couple of montha ago about the reason why draft laws or suggestions haven't even got to the stage of proposal forwarding for voting, and it's because it'd be a convenient way for politicians there to just suddenly declare their wealth by saying they've been early adopters and buying Bitcoin since whenever. Tax-free so no questions asked?

See this one: Ukrainian civil servants (read as politicians) own $2.6 billion in Bitcoin.

It makes sense that is why they are now having this regulation roadmap. It still doesn't look good for the future when regulations are focused more on terrorism, tax evasion, and laundering. All countries I guess are going to have regulations for crypto, it should, however, be considerate. Although the Ukrain seems to be democratic, regulations like this have the intention to prosecute someone who owns some Bitcoin.

[NeuroticFish]

There are detailed time frames in the full report in Ukrainian.

Then this becomes interesting... Also the ideas that Ukrainian politicians own big amounts of crypto gives all this a better weight.
It worth keeping an eye on it then and see how it'll go. September 2021 is not that far away, so it's a (impressingly) rather tight schedule too. Wow.

[buwaytress]

$2.6 billion is too high, there's probably some miscommunications and mistakes.

As I was thinking in an earlier thread discussing this, some were thinking it's just an inflation of numbers to provide a convenient excuse to explain all their ill-gotten gains. So when queried where all the millions came from, the all-encompassing answer is: "I bought Bitcoin". And since people don't know enough and there's no requirement to from the state (as there's no legislation), then it's just accepted and signed off.

[Pmalek]

All this makes me think that the Ukrainian government is also thinking of introducing its own state-regulated centralized coin. Although it's not mentioned in the article, the numbers in the last paragraph seem a bit too high. Assuming that almost 50% of all Ukrainians will use some sort of digital currency in the next 3 years seems to high unless a big chunk of it will include a digitalized government coin. 

[milani]

The more these "initiatives" by governments are coming forth, the more I realize that the governments are not going to do anything that is a positive for bitcoin, either from the regulatory perspective or in expanding the usage. El Salvador and President Nayib have proven to be a rare exception till now. The rest of the times, the noises made by governments are a result of self-serving politicians with a stake in bitcoin, like in this case.

Great words!! Every time I see new articles about governmental initiatives in Ukraine, every time my thoughts are like yours. Of course I would be happy to see Ukraine in the good things list of TOP countries. But there were lots of Ukrainian crypto startups and I do not know some of them that really reached high level not only worldwide, but even inside the country. And all governmental initiatives of such kind have one result mostly in the end - a small group of people get the high income, while lots of citizens pay dragon taxes or have strange limitations. The time will show everything. And I would be really glad to be mistaken this time in my conclusions about this article and those governmental plans.

[tranthidung]

Right now, cryptos are in a gray area in Ukraine: lots of people use it, no taxes are paid, and the authorities are fine with it all, unless someone's doing something clearly illegal, such as mining cryptos and not paying the electricity bills.

I fail to understand it. Electricity bills have to be paid and I guess what you implied is Ukrainian crypto miners pay electricity bills with rates that lower than they should be charged. Is it what you meant?

We've had several draft laws before which attempted to regulate the crypto industry, but they all failed to gain enough support in the Parliament. However, I think this time is different because the Ministry of digital transformation is involved.

When cryptocurrency become bigger and go to mainstream, deeper in human civilization than now, it will be a time for all governments to adjust their policies, laws, etc. in order to accept cryptocurrency officially in their nations. They will do more regulations, and force the stricter taxation policies on crypto investors / traders.

I see it is a normal trend and people should not feel over panic with changes in governmental policies.

[SFR10]

but what are your thoughts on this?

There are detailed time frames in the full report in Ukrainian. They intend to pass the law on virtual assets in September 2021, work on taxation and KYC policies in January 2022, make it possible to officially exchange cryptos for fiat and vice versa + establish the school program on virtual assets by July 2022, and open a master's program on DeFi in May 2024 (among many other things).

I'm quite impressed ^{[especially with the educational parts]}.
^{- Does the above time frames cover everything in the "full report" or you left out some?}

(you simply say you're an early BTC investor, and that's it).

By doing that, they'll be shooting themselves in the foot since it's not that hard to track and trace everything.

unless someone's doing something clearly illegal, such as mining cryptos and not paying the electricity bills.

I fail to understand it. Electricity bills have to be paid and I guess what you implied is Ukrainian crypto miners pay electricity bills with rates that lower than they should be charged. Is it what you meant?

I believe @kryptqnick was referring to those that steal electricity ^{[without any payments]} but there are also a few that have done it partially ^{[e.g. underground cryptocurrency mining operation busted by Ukraine police]}.