Ukraine set to integrate cryptocurrencies with its economy

Ukraine set to integrate cryptocurrencies with its economy

By Benson Toti - min read

National regulators have started collaborating with top crypto entrepreneurs regarding the integration of cryptocurrency and the wider economy

Ukraine has decided to start working on the research and development of cryptocurrencies, with national regulators currently collaborating with crypto entrepreneurs to determine their future plan for digital currencies.

Gleb Naumenko, a high profile Bitcoin developer in the country, who was recently awarded a $100,000 grant from BitMEX, explained that the country’s political situation is “somewhat unstable”.

This, alongside a strong interest in technology amongst Ukrainians, has created opportunities for people who want to make the shift from fiat to cryptocurrencies.

Naumenko explained further that with the national currency slowly losing value, the Ukrainian people are eager to explore other opportunities in technology.

Ukraine already has connections to the crypto industry, as it is the birthplace for teams that went on to create the crypto startups Hacken, Bitfury and Propy. It was also the starting point for numerous crypto developers.

While many of these developers have chosen to move overseas, the Deputy Minister for the Digital Transformation of Ukraine, Alex Bornyakov, believes that the country remains a competitive place for crypto startups.

Last April, Ukraine began monitoring crypto transactions to trace suspicious activities. The government also released a request for Ukrainians to report their crypto gains for tax purposes.

The country is currently passing a law that will define cryptocurrency as a form of property and layout the relevant procedures for crypto businesses in the country. The law must also undergo a hearing in parliament, which has not yet been scheduled.

Cryptocurrency offers a vast array of new economic opportunities. A regulated digital economy in Ukraine could help generate tax revenue for the government, define the way banks provide their services to crypto businesses and attract and retain industry talents.

Earlier this year, Minister Oksana Markarova announced in a press conference that all crypto-related transactions worth 30,000 hryvnias or more (around $1,200) will be strictly monitored by the government. This is in line with the anti-money laundering rules that the country had recently adopted at that time.

Crypto exchanges, trading platforms and banks will need to collect, store and provide authorities with detailed information regarding the identity of their customers, as well as the origin of the digital money that was transferred. If a user conducts the same type of crypto transactions multiple times, the data will only be gathered once.

Should any transaction arouse suspicion, operators are required to notify the State Financial Monitoring Service.