Ukraine plans to finalise crypto regulations by early 2025

Ukraine looks to regulate the cryptocurrency sector in 2025 but plans to offer no tax incentives for the sector. Speaking at a recent forum, Verkhovna Rada’s head of the tax committee, Daniil Getmantsev, confirmed Ukraine’s plans to finalise a draft bill to regulate the crypto space by the first quarter of 2025. The bill is currently being reviewed by a dedicated work group that is working closely with the National Bank of Ukraine (NBU) and the International Monetary Fund (IMF) to ensure comprehensive regulation of digital assets, with a focus on financial stability, fiscal oversight, and compliance with Anti-Money Laundering (AML) measures. The goal here is to create a transparent and secure framework to foster a regulated cryptocurrency market for both investors and businesses. No incentives Previously, rumours suggested that Ukraine’s regulatory approach would also look to offer tax incentives for the sector. However, Getmantsev has clarified that won’t be the case. Instead, the market would be treated as subject to standard taxation rules, similar to securities trading, with profits from cryptocurrency transactions subject to capital gains tax upon conversion to fiat currencies. With this approach, the regulators plan to mitigate the risks of tax evasion and ensure a stable flow of tax revenue to the country from crypto-related activities while maintaining fiscal integrity and reducing the potential for abuse through “tax incentives” that could be exploited for “tax evasion in traditional markets.” The development comes as the war between Ukraine and Russia continues to impact the local economy, with cryptocurrencies expected to be a vital tool for accessing financial support, protecting assets from inflation, and facilitating cross-border transactions without relying on traditional banking systems, which often face disruptions during times of distress. Bitcoin had already become a crucial asset for Ukrainians during the war, providing a reliable means of transferring funds, receiving donations, and safeguarding savings against inflation. Its decentralized nature has proven resilient , allowing individuals and organizations to bypass restrictions imposed by disrupted banking systems and government controls, further cementing its role as a store of value and a lifeline in times of crisis. Meanwhile, the IMF has urged Ukraine to fast-track its crypto legislation efforts. Earlier this year, the nation signed the Memorandum of Economic and Financial Policies, which outlines the need to finalise the update of virtual asset legislation by the end of 2024. Russia is also strengthening crypto efforts On the other side, Russia has also sped up its efforts to get a grip on the crypto sector. Last month, President Vladimir Putin signed a law that allows the country to tax crypto assets as property and regulate the mining sector. However, Russia offers an exemption from Value Added Tax (VAT) on crypto mining and the sale of digital currencies, unlike Ukraine, which has yet to introduce such provisions in its regulatory framework. Additionally, there have also been talks to establish a Bitcoin strategic reserve following in the footsteps of a Donald Trump-led United States. The post Ukraine plans to finalise crypto regulations by early 2025 appeared first on Invezz