Alternative Cryptocurrency Regulation Bills Introduced in Ukraine and Russia

News and Analysis

A draft bill that leaves crypto-to-crypto trading outside the state regulation has been filed this week in the Ukrainian parliament. The news was announced during BlockchainUA conference in Kyiv by Ukrainian MP Alexey Mushak.

The legislative proposal has been prepared in cooperation with representatives of the cryptocurrency industry and signed by 23 MPs of the Verkhovna Rada (Ukraine’s Parliament).

Notably, the document defines the term “virtual assets” and makes a distinction between cryptocurrencies and tokens. Cryptocurrency is described as a virtual asset that can function as a means of exchange and can store value. Tokenized assets, on the other hand, certify property or other rights of their holders that correspond to the obligations of an issuer.

The bill’s authors also propose a preferential tax regime for the industry with incomes and profits of both private individuals and corporate entities being subject to 5 percent tax until 2024. As such, the document opposes the idea of Sergey Verlanov, Ukraine’s deputy-finance minister, who earlier this month advised introducing a regular 19.5% income tax rate on rypto-related activities like trading and mining.

Quite importantly, the bill suggests that the government should be regulating only the crypto-to-fiat transactions while being relieved from any involvement in the crypto-to-crypto trading oversight.

The authors of the document hope that the bill will be passed by the end of the year.

Central Bank to play key role in crypto regulation in Russia

Meanwhile in Russia, an alternative draft law on digital financial assets has been introduced by a working group created by the Russian Union of Industrialists and Entrepreneurs

The document divides digital assets into three groups: digital tokens, security tokens and cryptocurrencies. As Elina Sidorenko, the head of the Russian Central Bank’s working group on cryptocurrencies, told ForkLog, this new bill will see the Central Bank of Russia regulating the crypto space and issuing licenses to providers of exchange services.

At the same time the companies which attract capital through initial coin offerings (ICOs) will not be required to apply for licenses while the issued tokens will serve as evidence of a civil law contract concluded between the ICO projects and the investors. The issuers of security tokens will have to abide by the rules applicable to traditional securities.

According to Mrs Sidorenko, this new bill is supposed to be a happy medium between the previous bills designed to regulate the cryptocurrency space Russia and the interests of big businesses who earlier criticized the existing legislative initiatives.

Notably, the authors of the new bill include some of the country’s top managers, such as Vladimir Potanin, the president of the mining and metallurgical company Nornickel; Mikhail Oseevsky, the CEO of Rostelecom, and a controversial billionaire Viktor Vekselberg, owner and president of Renova Group and the president of the Skolkovo Fund.

The new draft law is still under consideration and is expected to be discussed with the regulatory agencies next month.

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