Ukraine’s National Bank Unconditionally Endorses Virtual Industry But Doesn’t Under-estimate Risks

Benefits of the usage of virtual assets are duly recognized in Ukraine by its Government as well as country’s central bank. However, the central bank, while fully supporting technology and innovation, also afraid that the mass-usage of crypto in the country can overshadow national currency. While clarifying future monetary and financial policies, Ukraine’s central bank said that it will guard the national fiat at all costs because it is the absolute currency of the country.

Steps have been taking place in Ukraine where Government in Kyiv is trying to give more space to virtual assets in Ukraine. But more space will be provided on the condition that the crypto activities will be regulated and monitored by the respective regulators. In this regard, two weeks ago, a law, specially dealing with crypto”, was duly passed by the Ukrainian Parliament. Through the law, the Ukrainian Government has legalized the use of virtual currencies and assets.

After passing the law, the Government then moved on to amend the existing tax laws. The aim of amending the tax laws was to incorporate “crypto” within the tax law provisions. Kyiv Government wants to impose crypto tax and the proposal to amend the tax laws was also approved earlier by the Parliament.  To date, the amended version of the law hasn’t been placed before the Ukrainian Parliament. This means that the law is still under preparation and upon submission will be considered for approval.

But there is huge interest amongst Ukrainians as well as Government officials with regard to cryptocurrencies. Even world’s biggest crypto exchanges and crypto fund managers are trying to establish their businesses in Ukraine. They want to target Ukrainian as well as European investors. The crypto market in Ukraine works in a rather friendlier atmosphere. Even the country’s President regarded Ukrain’e crypto market as the “foundation” of Ukraine’s digital economy.

Similarly, not only the public and the country’s premier are the ones in recognized the benefits of crypto. Instead, the country’s central bank i.e. National Bank of Ukraine too has time and again duly endorsed how benefitting virtual currency is. In addition, National Bank of Ukraine, has been suggesting that the technology of virtual currencies must be used to better the country’s financial system. On several occasions also, National Bank of Ukraine has encouraged expansion of crypto industry and crypto economy.

However, the support of National Bank of Ukraine does not mean that crypto has obtained absolute trust of the bank. Instead, the bank hasn’t overlooked the dangers associated with the use and adoption of virtual currencies. For this, the bank has recently adopted a fresh monetary policy for the year 2022. In this adoption, it has been noted that massive use of virtual currencies may outshine national currency. However, being the guardian of the national currency, the bank will not let allow anything to surpass national fiat, even it involves crypto.