Ukraine Set to Legalize Cryptocurrencies by 2025

Ukraine plans to legalize cryptocurrencies by 2025, introducing clear tax regulations to ensure stability and prevent tax evasion.

Ukraine is set to officially legalize cryptocurrencies by the first quarter of 2025. The Ukrainian government is drafting a bill with help from the National Bank and the International Monetary Fund (IMF).

The bill is being finalized by a parliamentary working group. These updates were unveiled by Danylo Hetmantsev. He is the head of the Ukrainian Parliament’s Committee for Finances, Tax, and Customs Policy. He agreed with this and said that the bill will be ready for the first reading after New Year and aims at passing it in early 2025.

The legalization will offer legal structure to the expanding market for cryptocurrencies in the country. However, Hetmantsev stressed that no tax incentives for cryptocurrencies would be granted. The taxation of cryptocurrencies will mirror the taxation of securities. This means that the profits will be taxed every time, the cryptocurrencies are exchanged with fiat currency. Hetmantsev stated that this decision was made with the help of consultations of European partners and the International Monetary Fund.

Ukraine Pushes for Cryptocurrency Legalization with Clearer Tax Rules

The tax system in Ukraine is still evolving, and the government is quite careful when it comes to introducing new changes. The government is foregoing tax exemptions to ensure no issues of tax evasion that may result from the cryptocurrencies. Hetmantsev believes that cryptocurrencies can enable the evasion of taxes in traditional markets if tax incentives were offered. The cautious approach is designed to preserve the stability of the taxation system while the market of cryptocurrencies is being established.

In November 2023, for example, a draft law on the taxation of virtual assets was registered in the Ukrainian parliament. This is the last step towards the legal use of cryptocurrencies in Ukraine. It also explains how the transactions in virtual assets will be taxed, giving more specifics for the market.

The authorities of Ukraine recently introduced legislation for the legalization of crypto. This initiative will provide clearer directions for conducting cryptocurrency trades and investments among business entities. It will also support the enabling of foreign investment in the country’s digital asset industry. In this way, Ukraine will be prepared enough to better incorporate it into the country’s economic system of transactions.

Finally, the legalization of cryptocurrencies in Ukraine by 2025 will play an important role in operating the financial system of the country. With such a cautious attitude towards the taxation and regulation, Ukraine tries to create balanced environment for further growth while securing itself. With the help of the bill adoption, it will be possible to better regulate relations related to cryptocurrencies in the country.