Ukraine is preparing to legalize cryptocurrency at the beginning of 2025, applying standard tax regulations, with no special incentives.
Ukraine is moving closer to legalizing cryptocurrency by early 2025, marking an important step in managing digital assets in this Eastern European country. Mr. Daniil Getmantsev, Chairman of the Tax Committee of the Verkhovna Rada (Ukrainian Parliament), confirmed that the draft law on cryptocurrency is being finalized with the participation of the National Bank of Ukraine (NBU) and the International Monetary Fund (IMF).
According to the plan, the bill will be presented to the Parliament for the first time in Q1/2025. The draft aims to establish a transparent and secure legal framework for cryptocurrency-related activities, while ensuring financial stability and enhancing anti-money laundering (AML) measures.
This initiative promises to help Ukraine become a leading digital asset trading hub in Eastern Europe, especially as decentralized finance (DeFi) is booming. A report from Chainalysis shows that the region recorded cryptocurrency transaction values of up to $499 billion from July 2023 to June 2024.
A noteworthy point in this policy is that Ukraine applies standard tax regulations instead of special incentives. Accordingly, profits from cryptocurrency transactions will be taxed when converted to fiat currency, similar to securities trading. Mr. Getmantsev emphasized that the Tax Committee has carefully considered and believes that tax incentives could be abused to evade taxes in traditional markets. This regulation aims not only to prevent budget losses but also to ensure fairness among different types of assets.
In the context of the ongoing war with Russia, the legalization of cryptocurrency is expected to provide the people of Ukraine with a managed financial solution, helping to protect assets against inflation and facilitating cross-border transactions without relying on traditional banking systems. In fact, cryptocurrency has proven effective in supporting humanitarian aid, raising donations, and maintaining financial stability during times of crisis.
Ukraine's move is also in line with the global trend as many countries seek to regulate digital assets. Morocco, a country that banned cryptocurrency in 2017, is now also preparing to legalize this type of asset. The Central Bank of Morocco (Bank Al-Maghrib) has announced a draft law to regulate cryptocurrency and is studying the possibility of issuing a central bank digital currency (CBDC).