According to Pravda, Ukraine plans to officially legalize cryptocurrencies in the first quarter of 2025. The draft legislation is being prepared in collaboration with the IMF. Here are the details…
Green Light for Cryptocurrencies in Ukraine
Ukraine is gearing up to legalize cryptocurrencies. Danylo Hetmantsev, Head of the Parliamentary Committee on Finance, Tax, and Customs Policy, announced at the Domestic Investment Opportunities Forum organized by Ekonomichna Pravda that cryptocurrencies will gain legal status in the first quarter of 2025. However, he also clarified that tax exemptions would not be granted for cryptocurrency transactions.
Regarding the matter, Hetmantsev stated:
The parliamentary working group is ensuring that cryptocurrencies gain legal status. The draft law is currently being prepared for its first reading. This text has been developed in collaboration with the National Bank of Ukraine and the International Monetary Fund (IMF). We aim to have the draft ready early next year and plan for its legalization in the first quarter of 2025.
Taxation of Cryptocurrencies
Hetmantsev noted that cryptocurrencies would not receive special tax treatment, with the same model applied to securities being implemented. According to this model, taxes will be levied when cryptocurrencies are converted into profits. He explained their cautious approach toward tax exemptions with the following remarks:
“In discussions with European experts and the IMF, we have adopted a careful approach to avoid creating opportunities for tax evasion in traditional markets by granting tax exemptions to cryptocurrencies.”
As reported by Kriptokoin.com, the Italian government recently decided to reduce cryptocurrency taxes.
The Role of Cryptocurrencies in the Ukraine War
Steps to establish a legal framework for cryptocurrencies in Ukraine accelerated with the introduction of a bill in November 2023 aimed at taxing cryptocurrency transactions. The passage of this bill is seen as the final step toward making cryptocurrencies fully legal in Ukraine.
The war in Ukraine has highlighted the impact of digital tools and cryptocurrencies. According to blockchain analytics firm Elliptic, approximately $212 million worth of cryptocurrency donations have been made to support Ukraine as the war enters its second year. Of this amount, about $80 million was sent directly to the Ukrainian government.
According to the Ukrainian government and official fundraising platforms, crypto funds have been used to procure a wide range of defense equipment, from bulletproof vests and drones to demining tools and radios. They were also allocated to supportive needs, such as medical supplies.
The decentralized nature of cryptocurrencies enables rapid transfers, a feature particularly valuable for delivering swift financial support to war and disaster zones. Brynly Llyr, Head of Blockchain and Digital Assets at the World Economic Forum, noted:
“A significant advantage of emerging technologies is their ability to mobilize and deliver quickly. In Ukraine, we’ve seen millions of dollars in aid delivered within a day.”
According to a Chainalysis analysis, the Ukrainian government received over $56 million in cryptocurrency donations during the first month of the war. Most of these contributions were made in Bitcoin and Ethereum.
To stay up-to-date with the breaking news, follow us on Twitter, Facebook, and Instagram. Join our Telegram and YouTube channel
