Cryptocurrency: the benefits of the legalization in Ukraine

Ukrainian crypto market can bring to the budget 40 million hryvnias of taxes every day. Thus, it will benefit not only businesses and the state, but also ordinary citizens who have never heard of cryptocurrency.

“Every day the citizens of our country sell/buy cryptocurrencies for 4.2 billion hryvnias. Projected taxes from this amount, for example, at a rate of 1% – 40 million hryvnias for 1 day,” writes Vladimir Nosov.

Another form of income to the budget may become commissions, saved on bank transfers of citizens of Ukraine. According to the data provided by Nosov, this amount reaches from $500 million to $1 billion – how much Ukrainians pay to foreign banks abroad annually. Commissions for cryptotransactions are much lower.

The adoption of the law No. 3637 “On virtual assets” and its signing by President Vladimir Zelensky will further help Ukraine win the race for the title of “cryptocurrency center of Eastern Europe.” “Ukraine is becoming a convenient jurisdiction for investors.

Ukraine has a low tax rate (5%)

And the low tax rate (5%), which will apply only to the income received, may cause a cryptocurrency boom in the country. “Legalization and transparency of cryptocurrency exchanges is what we expect after the adoption of the entire legislative framework,” the expert added.

Vladimir Nosov noted that the law passed by the Rada will legally protect holders of cryptocurrency, as this type of assets will become legal property. “We will legislate – no one can dispose of cryptocurrency without the free will of the owner,” the author of the article explains.

He believes that only the state is able to create conditions for the control of exchange owners. This is necessary because there are a lot of examples in the history when the management of these sites simply ran away with the assets of their clients (for example, Thodex, PlusToken, Africrypt, StableMagnet).

Vladimir Nosov reminds that even if cryptocurrencies are legalized in Ukraine, the National Bank is not going to allow paying with bitcoin (or other virtual assets) for services, work or goods. But it is possible to solve this problem, as well as the issue with currency cards – through the conversion of euros and dollars.

“So what prevents bitcoin, for example, from being converted in a similar way? Here again we come back to the issue of security, because during transactions with cryptocurrency the authentication of the owner is needed,” said the crypto-expert.

Such a system can be created on the basis of already existing banks and the application “Dia”. 

“For the residents of Diya.City, where one of the best legal and tax regimes for the IT sector has been created, these are new opportunities for investment. The state gets new tax-paying counterparties, and business gets an opportunity to work legally, but without a huge fiscal burden,” Nosov states.

Thus, regulation of the cryptocurrency market opens up huge potential both for its participants and the state. It will bring additional taxes to the treasury, cryptocurrency platforms will gain trust and new clients, and income of Ukrainians will be legalized and protected.

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Arsen Islamov
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