Ukraine plans to legalize cryptocurrencies in 2025
December 13, 2024
Ukraine Prepares to Legalize Cryptocurrencies in Early 2025 This was announced by Danylo Hetmantsev, Head of the Verkhovna Rada Tax Committee, noting that the new legislation will not include tax benefits for digital assets.
Legislative framework for cryptocurrencies
The draft law, currently under development, is expected to be finalized by early 2025 in coordination with the National Bank of Ukraine (NBU) and the International Monetary Fund (IMF). Its goal is to create a transparent regulatory system for digital assets, focused on fiscal control.
According to plans, profits from cryptocurrency transactions will be subject to capital gains tax upon conversion to fiat currency. This approach is similar to the rules for securities trading, preventing tax benefits that could be exploited for tax evasion.
Hetmantsev emphasized that the Tax Committee takes a cautious approach to tax benefits to minimize the risk of tax evasion in traditional markets.
Key aspects of the upcoming draft law
The proposed legislation will regulate digital asset operations, focusing on:
- ensuring financial stability;
- combating money laundering (AML);
- creating a transparent legal framework for businesses and investors.
The draft law is expected to be presented for its first parliamentary reading in the first quarter of 2025.
Economic prospects
Cryptocurrency legalization could offer Ukrainians the following benefits:
- access to financial support;
- protection of assets from inflation;
- facilitation of cross-border transactions amidst disruptions in the traditional banking system.
Cryptocurrencies are already actively used in Ukraine for humanitarian aid, donations, and maintaining financial stability during the crisis.
Additionally, legalization aligns with the growing popularity of decentralized finance (DeFi) in Eastern Europe. According to reports, the region's cryptocurrency turnover reached $499 billion between July 2023 and June 2024.
Rejection of tax benefits
Unlike many global states, Ukraine has deliberately chosen not to offer tax breaks in the cryptocurrency industry. According to Hetmantsev, this approach ensures that profits from cryptocurrency activities are directed towards economic development and support of the state budget.