Ukraine has made some notable progress in the direction of regulating its cryptocurrency sector. The head of the National Securities and Stock Market Commission (NSSMC), Timur Khromaev, announced in a Facebook (NASDAQ:FB) post on Friday that the government has supported a new crypto regulations concept, namely to recognize specific categories of cryptocurrencies as financial instruments. The concept also establishes the roles and functions of governmental bodies in regulating those instruments, in addition to licensing transaction participants, defining information disclosure conditions, and other factors.
The idea was drafted by the Financial Stability Council – a body made up of officials from regulatory authorities including the National Bank of Ukraine, the Ministry of Finance, the National Financial Services Market Commission, the National Securities Commission and the Deposit Guarantee Fund.
“This is an important first step in building a consensus among government agencies and financial regulators which confirms the readiness to work with the Verkhovna Rada [the unicameral parliament of Ukraine] and the crypto market on forming a legislative and a regulatory framework that will ensure transparency and quality of relations between investors and crypto market participants,” Khromaev commented.
Kiev’s efforts to answer the ‘cryptocurrency question’
Cryptocurrencies have been gaining popularity in Ukraine. According to local media reports, the Eastern European country is in the top 10 by number of digital coin users around the world.
Kiev has long attempted to answer the ‘cryptocurrency question’, tackling the multiple problems associated with the unregulated circulation of digital currencies in the country. The decentralized nature of cryptocurrencies, coupled with their anonymity and the lack of regulation, means that they could be used in potentially illegal activities.
Three bills related to legalisation and regulation of the digital assets market have been filed since October 2017 but no significant progress has been made before the start of this year when the government formed a working group tasked with developing proposals for cryptocurrency regulation. The concept which has now gained the government support was suggested by the NSSMC in May. Khromaev noted at the time that the developing crypto industry has caused the crypto market to become an “integral part of economic and financial relations”, thus requiring appropriate legal recognition.
Meanwhile, Ukraine is developing as an attractive hub for crypto miners. Last month, the country’s State Service for Special Communications and Information Protection announced that the department does not have any plans in place to require any licensing for cryptocurrency mining.
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