Ukraine’s Crypto Legalization Affects The Crypto Market Positively
According to Ukraine’s minister for digital transformation, the nation’s president has signed a bill that legalizes crypto in the war-torn country. The bill is known as “on virtual assets,” proving a wider adoption of crypto and a big win for crypto market players.
Legalization Of Virtual Assets In Ukraine
Ukrainian authorities made a move following the massive amount of donations it received via crypto to strengthen its weaponry against Russia’s invasion. This official announcement on the legalization of crypto in Ukraine has positively impacted the crypto market. The overall evaluation of the crypto market soared by nearly 5.5% a few hours after the announcement.
Also, the prices of the top cryptos surged by about 4% after the announcement. Like a premonition, Ukraine parliamentary member, Verkhovna Rada, proposed this crypto legalization bill to the house exactly one week before Russia’s invasion. Even though virtual assets are now legalized in Ukraine, the sector’s activities will still be regulated by the nation’s apex bank and the national securities and stock market commission.
Highlights From The Bill
A clarification of the legalization status of crypto means that any Ukrainian resident has the legal rights to own and trade cryptos. Also, crypto players (including crypto exchanges) can operate legally once they obtain their operational licenses from the appropriate agencies. Furthermore, these crypto firms can use bank accounts freely without fear of victimization.
More importantly, part of the bill clarifies that there will be proper monitoring of activities in the virtual asset space, including virtual asset service providers and crypto exchanges. Hence, Ukraine’s finance ministry has announced that there will be a modification of the nation’s tax and civil codes to include crypto market regulations.
This move will enable the Eastern European nation to become one of the first countries to legalize crypto adoption even though it has started receiving criticisms. Ukraine is now the first nation to legalize crypto adoption (including all cryptos such as BTC, ETH, SOL, and others). That makes it different from El Salvador, which only legalized BTC adoption.
This new development will attract more crypto participants into Ukraine as many companies have expressed willingness in innovations that utilize blockchain technology. Commenting on the news, one of Ethereum’s founders, Joe Lubin, opined that the current Russia-Ukraine war has given wider publicity for the adoption of virtual assets and would likely remain so forever. As of this writing, donations for the ‘aid for Ukraine’ initiative have reached nearly $56m out of the targeted $200m.
Other Factors Affecting The Crypto Market
While the positive news from Ukraine has positively impacted the crypto market, the US Fed’s hike in interest threatened to cause a decline in the market. Crypto prices retreated slightly after the announcement from the US Fed.
The Fed’s explanation for the increase in rates was the worrying surge in inflation rates, culminating in a 40-year peak earlier in the month. Also, the Fed is worried that the ongoing war between Russia and Ukraine may likely escalate the inflation rate in the country as well.
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