Ukraine is about to Legalize Crypto in 2025

Hello Readers,

I hope you all are enjoying a beautiful day with your loved ones. I am also keeping an eye on the crypto market to be updated with the latest changes. Especially in high times like this, where Bitcoin has just made a new high at 104k USD and altcoins have also started to catch up with the rally. Our beloved Hive has been doing great as well and just recently it made a new high at 0.42$ and is currently being traded near a strong support level of 0.33$ price point. In the financial world, crypto is emerging as a new asset class, as not only retail investors but many big financial institutions have also started to scoop up Bitcoin and other cryptos, which is further strengthening the trust in crypto at the global level. Not only financial institutions or companies but also more and more countries are now legalizing and recognizing crypto, which is obviously opening new doors for this realm. In today’s post, I will be talking about one such good news that I just found today, so if you are interested, let’s take a dive without any further ado.

Yes, you read the title correctly! Ukraine is getting ready to make history by legalizing cryptocurrencies in the next year, 2025. This amazing and visionary decision taken by Danylo Hetmantsev, head of the Ukrainian Parliament’s Committee on Finance, Tax and Customs Policy, is a groundbreaking major step toward embracing digital innovation.

The Crypto Plan of Ukraine

Ukraine’s government is currently working hard to develop a draft law that will regulate cryptocurrency transactions. This legislation, developed in partnership with the National Bank of Ukraine (NBU) and the International Monetary Fund (IMF), is hopefully about to be finalized by early 2025. According to Hetmantsev, the bill will be ready for its first parliamentary reading most probably in the first quarter of the year. The primary goal of this upcoming law is to create a secure and transparent framework environment for crypto activities. The main goal of this bill is to prioritize financial stability and also to enforce Anti-Money Laundering (AML) measures so that they can provide a secure and safe environment for businesses and investors to invest and operate in the digital asset space.

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Why Now?

Ukraine’s bold move to legalize cryptocurrencies comes at a very crucial time, especially with the long ongoing war with Russia. During this ongoing war, cryptocurrencies have played a pivotal role and also become a lifeline for many Ukrainians. Crypto donations from many countries and organizations have poured in since the start of the war to support both humanitarian and military efforts. Not to mention this incident has proved it once again the real value and potential of borderless, decentralized funds in times of crisis like this.

On top of that, digital assets offer a way for Ukrainians to protect their wealth valuation from harsh volatility, which is very important considering the ongoing situation. Crypto has the power to save them from harsh inflation and protect them from financial disruptions, where money or the share market has a high chance of failing. In the last, the country has already acknowledged and embraced blockchain technology for some government functions and adopted FATF crypto standards in late 2023 to comply with the international regulations and is now preparing to take the next step forward. The timing also aligns with a surge in decentralized finance (DeFi) across all Eastern Europe regions. Between July 2023 and June 2024, the region received over $499 billion in cryptocurrency transactions, showing how digital assets are becoming a major financial force.

Tax Rules

Unlike some countries that are currently offering tax incentives for crypto investors, Ukraine is rather taking a more cautious approach while applying tax on cryptocurrency. Profits from cryptocurrency transactions will be taxed under the same rules as securities. This simply means that only when cryptocurrencies are converted into traditional currencies (fiat) will they be taxed based on profits. Hetmantsev also explained that this decision was cautiously made to avoid the potential misuse of any kind of tax exemptions. "Tax incentives can be exploited for evasion," he said, adding that consultations with European experts and the IMF influenced this careful stance. The Ukraine government’s priority is to ensure revenue income generation from crypto activities that will benefit the country without opening doors to tax evasion.

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The Bigger Picture

Legalizing cryptocurrencies will portray Ukraine as a leader in Eastern Europe’s digital economy. By regulating this rapidly growing sector, the country aims to attract international investors, provide a better environment for financial innovation, and also offer its citizens new economic opportunities. This initiative reflects Ukraine’s commitment to modernize its economy for the greater good, even during challenging times. As 2025 is about to arrive pretty soon, the whole world will be watching Ukraine’s bold step and how it will actually benefit this country in real life.

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I hope you are excited to know this news and liked reading my post. Let me know your thoughts regarding this topic in the comment section below and I will be seeing you all in my next post.

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