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- President wants the securities commission to regulate cryptocurrency
- CBDC monitoring to the National Bank
- Virtual asset forms should be issued by financial institutions
The year-long race to legalise cryptocurrencies in Ukraine has taken a detour. President Volodymyr Zelensky returned the country’s first measure regulating digital assets to parliament for revisions rather than signing it into law.
According to an announcement on the president’s website, Zelensky wants the bill altered so that Ukraine’s version of the US Securities and Exchange Commission, the National Commission on Securities and Stock Market, becomes the primary crypto regulator.
In the current version, cryptocurrencies are regulated by the Ministry of Digital Transformation, digital assets backed by securities are regulated by the National Commission on Securities and Stock Market, and central bank digital currency (CBDC) issuance is regulated by the National Bank of Ukraine.
President’s suggestions
The president’s version delegated CBDC monitoring to the National Bank, but everything else, including the registration of crypto brokers and other services, to the securities regulator.
In particular, the published reports of the International Organization of Securities Commissions (IOSCO) say that certain forms of virtual assets have properties that are indicative of financial instruments in their economic essence. The president’s address to parliament, which was published on the legislature’s website, stated that regulation of the issuing of such forms of virtual assets should be carried out by financial market authorities, as this function is peculiar to them.
New version on roll
Parliament will now have to reconsider the measure and propose a new version. The measure, which was submitted into parliament last summer with the help of the local crypto community, was drafted with their assistance. In September, the document passed a second hearing and was forwarded to Zelensky for signature.
Several well-known blockchain developers and startups are based in Ukraine. However, the country is grappling with its reputation as a high-risk jurisdiction on the international stage. The measure, supported by Ukraine’s Ministry of Digital Transformation, aims to grow the country’s digital asset market and attract crypto companies.
Digital assets are non-material things with monetary value that are represented by a set of data in electronic form, according to the legislation. There are two types of digital assets: those that are backed by other assets and those that are not. In Ukraine, digital assets cannot be used to pay for products and services directly. According to the recently passed On Payment Services law, digital assets include the CBDC, which the central bank can issue.
Legal ownership of a digital asset is defined under the new bill as control over its keys, unless they were stolen or held by a custodian, either due to an agreement with the owner or a court ruling. The agreement also lays down the groundwork for enterprises in Ukraine that deal with digital assets.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
