Ukraine Central Bank Rejects Crypto Regulation Bill Over Financial Stability Risks
The National Bank of Ukraine (NBU) has opposed a new bill aimed at legalizing and regulating cryptocurrencies, arguing that the proposed framework does not provide enough protection for the country's financial system.
The central bank said draft law No. 10225-d fails to address several concerns raised during discussions with lawmakers, regulators and representatives of the crypto industry. While the NBU supports establishing clear rules for digital assets, it believes the legislation needs further changes before moving forward.
The bank favors a regulatory framework based on the European Union's Markets in Crypto-Assets (MiCA) rules and recommendations from the International Monetary Fund (IMF). However, it warned that the current proposal lacks important safeguards.
The NBU also criticized the legislative process, saying it received the final version of the bill late Tuesday, leaving limited time to examine the changes before a parliamentary committee approved it for a second reading.
The central bank stressed that crypto market growth must not threaten Ukraine's monetary sovereignty, price stability, financial stability or economic security.
NBU Raises Concerns Over Foreign Crypto Tokens
One of the bank's main concerns involves foreign-issued digital tokens that could enter the Ukrainian market without proper supervision in their countries of origin.
Some of these assets could function similarly to electronic money, potentially creating risks for the country's monetary system. The NBU wants authority to evaluate foreign tokens and restrict their use when necessary, similar to the powers it would have over digital assets issued within Ukraine.
The bank also warned that foreign-issued cryptocurrencies could allow businesses to avoid regulatory requirements that apply to comparable domestic assets.
Market access is another point of disagreement. The NBU previously supported a compromise that would initially allow only three crypto trading platform operators to enter the market through a competitive selection process.
However, the latest version of the bill gives Ukraine's securities regulator the authority to decide how many operators can participate during the first five years. The central bank believes this could increase market concentration and create opportunities for corruption.
Ukraine's Crypto Tax Rules Under Review
Under the proposed framework, the National Securities and Stock Market Commission (NSSMC) would become the main regulator of Ukraine's cryptocurrency market.
The initial proposal included an 18% personal income tax on crypto profits, alongside a 5% military levy. However, the updated version introduces a temporary 5% tax rate for existing crypto holdings until the end of 2028.
The bill also specifically exempts cryptocurrency-to-cryptocurrency transactions from taxation.
Ukraine's Crypto Legalization Plans Face More Uncertainty
Ukraine has previously attempted to establish a legal framework for digital assets. President Volodymyr Zelenskyy signed a virtual assets law in March 2022 after rejecting an earlier version. However, the legislation never came into force because it required additional changes to the country's tax code.
Authorities have also discussed allowing the central bank to include cryptocurrencies in its reserves. In June, Ukrainian authorities transferred $8.3 million in seized digital assets, adding to discussions about a possible strategic crypto reserve.
The NBU is now calling for further revisions to the proposed legislation before lawmakers continue the process.
Its opposition creates another obstacle for Ukraine's plans to regulate crypto trading, establish taxation rules and bring the digital asset industry under a formal legal framework.