Ukrainian President Volodymyr Zelensky blocks crypto bill

President Zelensky stops cryptocurrency legalisation on the grounds of regulatory efficiency

The rapid acceleration of digital asset adoption and innovation seen in Ukraine in the past two years ran into somewhat of a roadblock this week when the country’s president, Volodymyr Zelensky, rejected a bill regulating the sector.  

The bill, which was set in motion in 2020, passed with the almost unanimous approval of the Ukrainian parliament last month. Under the existing system, Ukranians are allowed to purchase and sell digital currencies but crypto-related companies and exchanges face a relatively antagonistic legal framework. 

Although generally supportive of the burgeoning sector, President Zelensky blocked the latest legislation in opposition to the regulatory hierarchy it proposes.  

Regulatory structure

Under the new bill, the National Bank of Ukraine will control any development and launch of a central bank digital currency (CBDC), the Ministry of Digital Transformation will regulate cryptocurrencies, while the National Commission on Securities and Stock Market will oversee digital assets that are backed by securities. 

On the grounds of excessive expenditure, the president instead proposed that all digital asset regulation, with the exception of the CBDCs, should be overseen by the National Commission on Securities and Stock Market. 

Although maybe disgruntled, the 5.5 million Ukrainians that are estimated to own cryptocurrencies, equivalent to 12.7% of the nation’s total population, may well be breathing a sigh of relief to know that the delay was caused by a desire for bureaucratic efficiency and not last-minute second thoughts as to the viability of the controversial technology. 

Cryptocurrencies themselves enjoyed a day of strong gains on Wednesday. By 16:30 (BST), Bitcoin and Ethereum traded up by 6.2% and 2.3%, respectively, approaching month-long highs. 

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