Ukraine is prepared to lead Eastern Europe’s crypto space

[Cordillerabit]

Ukraine is ranked as the world’s leader in the Global Crypto Adoption Index 2020, according to a research published by Chainalysis earlier this fall. Despite this, cryptocurrencies still remain a gray area in the economy. Since 2014, Ukrainian authorities have been trying to implement crypto legislation that would transform the country into a competitive jurisdiction for running crypto-related businesses, but the efforts did not yield any results. Finally, just a few months ago, the Ukranian government presented a new bill on digital assets to legitimize the sector — and this time, the attempt may well be successful.

The fintech strategy of the Ukrainian central bank, or NBU, pledged to legalize activities using cryptocurrencies. According to the document, by 2025, crypto assets will fully enter the legislative field and a transparent infrastructure will be created to allow it to operate on the market.

The first steps on this path were taken in late 2019. Since then, parliament members have passed a law on implementing the Financial Action Task Force’s standards for combating money laundering and the financing of terrorism. Among other things, the standards contain the concept of digital assets.

New attempts to legalize crypto
The new bill seems to outline a solid action plan and delegates responsibilities. It clearly states that the governmental Ministry of Digital Transformation will be the main regulator controlling and monitoring any activity using crypto assets. As for tracking suspicious crypto transactions, the department has already agreed to cooperate with blockchain analytics firm Crystal Blockchain BV, developed by Bitfury Group.

As expected, digital assets are not considered as a means of payment in the new bill. It is rather described as an intangible asset, a kind of power of attorney for property with which any operation can be performed, except for payment.

The document’s authors tried to advise on all areas of usage of digital assets, ranging from initial coin offerings to initial exchange offerings (albeit belatedly) to stablecoins and other possible tokenized assets. Not limited only to this, the new bill describes all the rights and requirements related to custodians of digital assets, including exchanges, multi-signature wallets and any organization that now works and thrives in the crypto environment.

Given that crypto adoption in Ukraine is growing rapidly, particularly in the decentralized finance and decentralized autonomous organization infrastructures, it is crucial that the new legislation highlights the difference between these two spaces. What is particularly interesting is the possibility of regulating the work of decentralized autonomous organizations, or DAOs.

However, if the new Ukrainian regulations don’t cover DAO features, the voting rights given to users making decisions within a DAO may be considered illegal. This shows the importance of why processes such as voting on protocol governance should be established in the law.

Source: https://cointelegraph.com/news/ukraine-is-prepared-to-lead-eastern-europe-s-crypto-space