Cryptocurrencies were not illegal in Ukraine prior to the law, even if the latest government announcement does not mention Bitcoin becoming legal tender in the country, unlike in El Salvador.

A month after the Ukrainian parliament passed a bill to legalize cryptocurrencies such as Bitcoin and Ethereum, the country’s president, Volodymyr Zelenskyy, has now signed it into law. The development came amid millions of dollars in crypto donations that Ukraine has received to fund its war effort against the Russian invasion. According to a statement released on Wednesday by the Ukrainian Ministry of Digital Transformation, the “On Virtual Assets” law creates the conditions for the launch of a legal virtual asset market in Ukraine. The new market will be regulated by the National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine.

Importantly, cryptocurrencies were not illegal in Ukraine prior to the law, even if the latest government announcement does not mention Bitcoin becoming legal tender in the country, unlike in El Salvador. Moreover, even without formal regulation, Ukraine ranked fourth on the Chainalysis 2021 Global Crypto Adoption Index after Vietnam, India and Pakistan. The index measures the levels of crypto adoption at institutions of countries, ordinary people, and focuses on use cases related to transactions and individual savings.

Nevertheless, the new law will now allow foreign and Ukrainian cryptocurrency exchanges to operate legally and also banks to open accounts for crypto companies. The development was also announced by the ministry on Twitter.

Ukraine has legalized the crypto sector @ZelenskyyUa signed a law. From now on, foreign and Ukrainian cryptocurrencies exchanges will operate legally and banks will open accounts for crypto companies. It is an important step towards the development of the VA market in Ukraine.

— ерство цифрової трансформації України (@mintsyfra) March 16, 2022

The NSSMC will shape and implement state policies in the field of virtual assets, determine the order of turnover of virtual assets, license virtual asset service providers and also regulate, supervise and financially monitor this area, the ministry added. Currently, the country’s Ministry of Finance is also “actively working on amending the tax and civil laws of Ukraine to fully launch the virtual asset market.”

Also read: Institutional investors withdraw money from crypto funds after seven-week influx

Work on regulating cryptocurrencies in the country has been underway for almost two years. In fact, in September last year, Zelenskyy had rejected an earlier draft of the bill asking for amendments to make NSSMC the regulator of the crypto market. The government first submitted the revised version of the bill in February last year.

Ukrainian Deputy Minister of Digital Transformation Alex Bornyakov tweeted that the crypto industry offers new economic opportunities. He said the government will do its best to bring the bright new future closer as soon as possible.

According to the ministry’s website, Ukraine has received $55 million in crypto donations so far since Russia began invading it last month. According to data tweeted by Bornyakov on March 11, 2022, Ukraine has provided 5,550 body armor, 4.10 lakh packed lunches, 500 helmets, 3,427 medicines, 60 walkie-talkies, 500 ballistic plates for body armor, 3,125 thermal imagers and optics to its army through money donated. has been donated via crypto since March 1.

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