A top executive in Ukraine’s central bank says that the number of regulatory agencies is already hindering the growth of digital currencies in the country. The bank executive stresses that what the industry needs right now is appropriate regulations and laws that will foster growth.
National Bank of Ukraine (NBU) Strategies and Reforms Department head Mikhail Vidyakin thinks that the primary issues concerning the legalization of crypto assets are institutional in nature. Even though the Ukrainian law has yet to regulate and define digital currencies, too many regulators are currently monitoring the space.
In an interview with crypto news agency Let Know, Vidyakin says that he prefers regulations that will give the crypto market an opportunity to grow. He underscores that conventional banks need to embrace the fintech sector, which offers novel means for financial services. The central bank official believes that Kiev authorities need to lessen the number of regulatory agencies overseeing cryptocurrency firms. Vidyakin adds that authorities must then look into the absence of regulations and legal definitions for financial innovations.
Prior to Vidyakin, Pavel Petrenko, Ukraine’s minister of justice, gave the same recommendations in January last year. He asserted:
“Bitcoin must be brought into the legal field.”
Kiev-based National Cybersecurity Coordination Center has discussed in a meeting the status of virtual assets. Members have conveyed their concerns on “the uncontrolled circulation of cryptocurrencies in Ukraine.” Meanwhile, Oleksandr Turchynov, the Secretary of the National Security Council, emphasizes that “the development of the cryptocurrency market cannot be left unattended.”
Since the fall of 2017, several draft laws aimed at regulating the cryptocurrency industry and propositions for tax breaks have been presented at the Ukrainian parliament. Yet, no major development has been attained toward its implementation.
A new regulatory concept has been revealed last October. The document states that Ukraine is set to “fully legalize” digital currencies in two phases within the next three years. This means that the legal status of crypto exchanges will be established this year. Meanwhile, crypto wallet providers and custodial platforms are to be regulated by 2021.
The Financial Stability Council has approved a new policy which includes representatives of NBU, the National Financial Services Market Commission, the National Securities, Stock Market Commission (NSSMC), the Deposit Guarantee Fund, and the Ministry of Finance. Two of the said institutions (NSSMC and NBU) are expected to manage the crypto sector.
According to research published by USAID in December, Ukrainians trade roughly $775 million in digital currency annually. Entitled “Transformation of the financial sector,” the research authors recommended that virtual coins needed to be deemed as “currency valuables” and regulated as foreign fiat currencies.