Ukraine Legalises Cryptocurrencies Amid Soaring Tensions With Russia

Ukraine legalised cryptocurrencies on Thursday amidst tensions with Russia that have disturbed global markets in the past week due to international concerns over the possibility of a war.

"Ukraine is already in top-5 countries on cryptocurrency usage. Today, we made one more step forward: Parliament adopted the law on virtual assets! This will legalize crypto exchanges and cryptocurrencies, and Ukrainians could protect their assets from possible abuse or fraud," tweeted Ukraine's Vice Prime Minister Mykhailo Fedorov.

Bitcoin donations have skyrocketed to Ukrainian volunteer and hacking groups, some of which have supplied gear to government forces, according to reports highlight the amassing of $550,000 worth of cryptocurrency in 2021 through crypto funding. The bill's passage was Ukraine’s second shot to legalise bitcoin, and a similar activity was made by the Ukrainian parliament in October when the government introduced a bill to construct a new autonomous regulatory body to supervise crypto exchanges.

A report, published by research agency Elliptic, indicates digital currencies are increasing in importance as a allocation method for volunteer groups reinforcing Ukraine's government as fears of an attack by Russian troops huddled near its border increase. Moscow declines the allegation of planning an attack altogether.

However, the bill does not make Bitcoin a legal tender, according to a report by Bitcoin Magazine. The report also recapped that the National Securities Commission will now allocate permits to Bitcoin and cryptocurrency service providers, and it will also launch supervision and economical monitoring of the cryptocurrency market.

In 2020, Ukraine constricted checks to curb money laundering, demanding ID verification for some domestic cash transfers. According to the Ukrainian National Bar Association, cross-border transfers are also subject to mandatory monitoring.

Meanwhile, Russia is also planning to regulate cryptocurrency as ‘an analogue of currencies’ rather than a ‘financial asset’, which is a changeover from the previous Russian law, which came into enactment in January, last year.

Bitcoin donations have spiked up to Ukrainian volunteer and hacking groups, it is suspected that some of which have supplied equipment to government forces, according to a report by blockchain researcher Elliptic. The report further mentions that such groups received more than $550,000 worth of cryptocurrency in 2021.