Ukraine’s Ministry of Digital Transformation outlines conditions to resume hryvnia-denominated trading on Bitcoin exchanges

The adoption of legislation on virtual assets would allow resuming hryvnia-denominated operations on foreign cryptocurrency exchanges, according to Yulia Parhomenko, director of the Directorate of Digital Economy at Ukraine’s Ministry of Digital Transformation.

According to her, the Ukrainian cryptocurrency market is currently in a state of stagnation due to the lack of regulation.

The entry into force law adopted in 2021 on the ‘On Virtual Assets’ law has been postponed until the taxation of digital asset operations is introduced. In addition, the text of the regulation has been updated to reflect the provisions of the European regulation MiCA. A new version was submitted to Ukraine’s Verkhovna Rada on November 7.

Alongside it, НКЦБФР presented a tax bill, proposing a rate of 18%, which was met with criticism from civil society.

In turn, the Ministry of Digital Transformation presented a draft of an alternative law, which envisages a gradual increase in the rate for individuals and exemption of legal entities from VAT, except for transactions involving tokenised assets.

«We face the task of swiftly passing the legislation ‘On Virtual Assets’ to resume the operation of fiat gateways with virtual-asset service providers registered outside Ukraine, enabling market participants to operate fully,’ Parhomenko said.

Among the department’s proposals is the creation of an innovation zone for testing digital products, where one can operate for three years without prior registration.

The official stressed that implementing all provisions of their bill would strengthen Ukraine’s competitiveness in the global crypto market.

In March 2023, foreign cryptocurrency exchanges reported a temporary suspension of operations via hryvnia-denominated bank cards amid an intensified crackdown on illegal gambling.

Since 16 March 2022, PrivatBank has temporarily barred customers from funding hryvnias to cryptocurrency exchanges, though this did not affect the Ukrainian trading-platform market. The restriction stems from the National Bank’s decision and remains in force during martial law.

Additionally, to curb capital outflows, from the end of April that year the NBU restricted purchases of cryptocurrencies to 100,000 hryvnias per person per month.