Considering this, the new administration has injected a fresh energy by renewing the interest in the legalization of the cryptocurrency and regulating the economic activities related to the same. By accommodating this nascent industry, the government of Ukraine expects an increase in the budget revenues. The legalization might also lead the companies to finally come out of the “grey sector”. (Let Know Cryptocurrency News, n.d) An open meeting called
“Blockchain4Ukraine” uniting officials from the National Bank, MPs, and other lawmakers coming from a variety of political factions was held. The document included a few steps which the government and private sector should consider to achieve the goal that has been set. It includes attracting international crypto-asset exchanges to Ukraine, legalization of mining, and development of the legal terminology which is needed to regulate this sector. The strategy also includes implementation of FATF standards given for money laundering and integration of blockchain technology in the registries of the government. (Ministry and Committee digital transformation of Ukraine, 2020) Following this, the Ministry of Digital Transformation of Ukraine, on 15 June 2020, registered a bill “On Virtual Assets”. Although virtual assets have been a component of Ukraine's financial sector for several years, they did not lie in the legal field of this country and hence to bridge this gap, the bill was published. According to this bill, participants can pay income tax, use banking services, and receive legal support in courts regarding violation of their rights. It emphasises on the protection of investors from Ukraine when investing in the crypto asset market. (IDEA, 2019) According to the study on public officials’ asset declaration, it was found that over 21,000 bitcoins were declared by 57 officials.
(Chainalysis, 2020) Also, according to Chainalysis - a blockchain data analytics firm, Ukraine holds rank 1 among 153 other countries in The 2020 Global Crypto Adoption Index.
Acknowledging the status given by the NBU, the outcomes of the Blockchain4Ukraine meeting, and the bill on virtual assets, it is convinced that Ukraine has a positive sentiment on the emergence of cryptocurrency. Ukraine sees a promising future of cryptocurrency with advantages like increased budget revenue, international investments, political finance, etc.
Ukraine crafts and proposes a few solutions which can be held into account for smooth administration of the crypto-friendly government:
1. Financial Literacy in Cryptocurrency (FLC):
Throwing light on the position of National Bank of Ukraine and the bill of virtual assets, seminars or sessions can be organized by the government to let the common public of Ukraine get well informed about the cryptocurrency, its advantages and also risk associated with it. This might also lead to a new investment option for the people, on the
successful execution of which will lead to a direct or indirect development of the economy of the country.
2. Strict Banking & Tax Systems and Crypto Banks:
As the bill on virtual assets allows participants to use banking services and pay taxes, there is a dire need of strict banking and tax systems. There should be a separate section for crypto investors in the banks and even the employees working should have a deep understanding of the algorithm and working of the cryptocurrency and the laws and bills related to it. The banks should also provide crypto banking service since, as compared to traditional banks, crypto banks are more immune to the data hacks. This will help in controlling the illicit activities and result in the smooth functioning of a crypto-friendly nation.
3. Cryptocurrency or Hardware Wallet:
The government, companies, and even common people investing in crypto assets should be made aware of the cryptocurrency wallet or hardware wallet. It is one such device which helps in storing the private and/or public key in a hardware device which is secure.
Though it includes investment, considering the functionalities offered and for a safe &
secure investment experience in crypto-assets market, the hardware wallet or cryptocurrency wallet should have opted.
Bibliography
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