On the 16th March 2022, Ukrainian President Volodymyr Zelensky signed a bill that makes bitcoin and other cryptocurrencies legal in Ukraine. But why was this move made and what wider impacts might this have on bitcoin and other cryptocurrencies? In this guide, we run down everything you need to know.
What Does The Bill Mean?
The landmark bill is known as the “Virtual Assets” bill in full and it establishes the legal framework for the use of cryptocurrencies in Ukraine, determining their legal classification with regards to ownership and regulation.
It will allow crypto exchanges and companies to operate in Ukraine legally, with full access and support from the traditional finance sector.
This means that crypto will be more easily accessible for Ukrainians, opening up the virtual assets market for them. Before this, crypto adopted a strange position in Ukraine as it was neither legal nor banned, and Zelensky vetoed this same bill in September 2021 saying it would be too costly to set up the framework.
This change of heart comes as over $100 million worth of cryptocurrency has been donated to Ukraine in the wake of the Russian invasion which has seen over 3.2 million refugees flee the country.
Ukraine’s Vice Prime Minister Mykhailo Fedorov publicly asked for funds to help the Ukrainian people and “contribute to the Ukrainian victory”.
By opening up the crypto market, they can access these funds that have been donated as crypto and this opens new economic opportunities for Ukrainian people which could support them as they readjust to life during and after the conflict.
What Does This Mean For Bitcoin?
Bitcoin investors will welcome this move as it may drive an increase in its value. Its price has managed to hold firm at $40,000 since the announcement, experiencing a period of remarkable price stability, in the upper bounds of the window that it has been trading with since January.
Zelensky’s decision comes as cryptocurrency as a whole has an emerging role as a store of value during these times of geopolitical and economic unrest, so this new bill shows that it is valued and could increase in popularity.