Ukrainian Lawmakers to Decide Bitcoin’s Legal Status

News and Analysis

The Ukrainian Cabinet of Ministers on the Financial Stability Board met last week to discuss the issue of cryptocurrency regulation. The participants engaged in a debate about the legal status of bitcoin and other cryptocurrencies.

“Everyone understands the importance of blockchain and cryptocurrency as innovative technologies, the importance of developing the industry, protecting against illegal actions by various bodies and reasonable regulatory support,” Deputy Chairman of the National Bank of Ukraine (NBU) Council Tymofiy Mylovanov explained.

The Chairman of the National Securities and Stock Market Commission (NSSMC), Timur Khromaev, added:

“The question of blockchains, bitcoins, tokens and other technology solutions have already become an integral part of the financial market. Our task is to provide the corresponding legal status of these instruments in the Ukrainian financial market”.

Oleksiy Mushak, People’s Deputy from the Petro Poroshenko Bloc political party, revealed that the ministers “promised to regulate the status of bitcoin,” adding that “my impression of the meeting is more positive than fears.”

“There will be a common position of the NBU, the Ministry of Finance, the NSSMC and other regulators in this regard. It was even a desire to announce now that bitcoin and blockchain are not evil and not forbidden. But they decided to take 3 weeks…to be more thorough. A common position will be published on the sites of all regulators,” he detailed on Facebook.

Olexandr Danchenko, People’s Deputy of the Verkhovna Rada, explained that participants have agreed to work with the Ministry of Finance, the NBU, the Parliament and the blockchain community “in the next 3 weeks after which it is possible to expect a positive signal for the market.”

Central Bank’s Comments

After the Financial Stability Board’s meeting, the NBU commented on the current legal status of bitcoin. NBU acting head Yakiv Smoliy said during the bank’s presentation that the central bank neither recognizes bitcoin nor prohibits bitcoin mining, reported Unian news agency.

He elaborated that bitcoin currently does not fit into any definition the bank has such as currency, money surrogate, or electronic money. Citing that bitcoin does not have a centralized issuer but is traded as a commodity, he said,“we believe that it is not a currency.”

“We cannot determine what it is today,” he declared, noting that the regulators will find its definition within the framework of the Financial Stability Board as soon as possible.

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