Will there be such positive progress with cryptocurrencies in Ukraine as in the USA, given that the hryvnia is devaluing faster than the US dollar?
In Ukraine, there are no plans to recognize bitcoin or other cryptocurrencies as a means of payment. Only the hryvnia can be one, as otherwise, it threatens to undermine the capabilities of the National Bank (NBU) as the main financial regulator.
This was stated by the head of the NBU, Andriy Pyshny, to Ukrainian media. He called the issue of recognizing virtual assets as a means of payment the 'red line' for the National Bank.
"Virtual assets cannot be a means of payment, they cannot in any way undermine the effectiveness of our monetary instruments. There should be no transfer of monetary powers and undermining of the capabilities of the National Bank, given the legalization of virtual assets," emphasized Pyshny.
What challenges does the legalization of 'crypto' bring?
He emphasized that cryptocurrency should not become a tool for circumventing financial restrictions imposed in Ukraine due to martial law to balance the monetary market and ensure a sufficient level of foreign exchange reserves.
"It is important to provide regulators with a sufficiently high level of authority to respond accordingly and apply measures for violations of consumer rights in the virtual asset market. To have a sufficient level of competence for regulation and the necessary technical solutions for monitoring market participants with virtual assets," explains the head of the NBU.
In addition, the legalization of virtual assets should not undermine the effectiveness of financial monitoring or fuel the shadow sector. For this, norms of international FATF standards and relevant European regulations must be implemented into legislation.
"In my opinion, it would be ideal if the legalization of virtual assets allows for the dematerialization of the market, which would also positively affect the assessment of our financial sector by Western partners," Pyshny believes.
At the same time, he agreed on the necessity of returning cryptocurrency to economic circulation, but not at the cost of undermining the National Bank's ability to be effective in achieving its mandate for price stability. "Therefore, we say that the 'red line' for us is this – only the hryvnia is a legal means of payment on the territory of Ukraine," warned the head of the National Bank.
In April, the committee of the Verkhovna Rada on finance, tax, and customs policy approved a revised bill on the regulation and taxation of virtual assets for the first reading. However, the President's Office blocked its further consideration.
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