In what could be termed as insightful observation, one of the key representatives of Ukrainian Central Bank, Mikhail Vidyakin, said that the primary stumbling block in the legalization of cryptocurrencies in the country is institutional in nature. Vidyakin heads the Strategies and Reform department at Ukraine’s National Bank and believes that too many regulators assigned with the task of overseeing the Crypto industry are creating hurdles for its legalization process. This is even as the country is yet to regularize and define cryptocurrencies according to Ukrainian law.
Vidyakin was speaking to a Let know crypto news agency and said that he believes in providing a fair growth chance to the Crypto industry and is in favor of regulations that will enable digital currency to grow in the country. He also emphasized that the traditional banks should not be closed for the new generation financial technology firms which are providing a new way of delivering the financial services. Vidyakin also suggested that the policymakers in the Kiev should first reduce the number of regulatory agencies overseeing the crypto industry and then address the issue of legally defining cryptocurrencies and regulations regarding it.
Multiple Voices for regulations
It is not for the first time that any Ukrainian official has voiced his concern over cryptocurrency regulation in the country. In January last year, the minister of justice of Ukraine, Pavel Petrenko had made similar recommendations to the authorities. The Minister insisted that the Bitcoin should be given legal status and necessary changes in this regard must be made in the country’s constitution and regulatory framework. The issue of cryptocurrency and digital assets was also discussed in a meeting of National Cybersecurity Coordination Centre hosted in Ukraine’s capital. The members of the coordination center expressed their concerns over the rapidly growing uncontrolled circulation of the cryptocurrencies in the country. Stressing on the point that the issue of cryptocurrencies must not be left unattended, secretary national Security Council, Oleksandr Turchynov noted that the issue of cryptocurrency must be given due attention in the interest of national security and healthy economic development.
Reforms on the Anvil
Interestingly, the Ukrainian Parliament has witnessed submission of a number of draft bills regarding regulation of the cryptocurrencies and many proposals for the text breaks since September 2017; however, a little progress has been made to adopt and implement these drafts and proposals. In October last year, the government announced a new regulatory concept according to which cryptocurrencies will be fully legalized in the country within the three years. The concept proposes to do so in two stages – the first stage will determine the legal status of various Crypto exchanges by 2019, and in the second stage, custodial platforms and Crypto wallets will come under regulation by 2021. The approval to new policy was given by financial stability Council (FSC) having the representations from the National Bank of Ukraine (NBU), National Financial Services Market Commission (NFSMC), National Securities and Stock Market Commission (NSSMC), the ministry of finance, and the Deposit Guarantee Fund. Out of these institutions, at least two, NSSMC and NBU will be provided with the responsibility of directly overseeing the crypto industry.
Potential for Growth
A Study report released by the United States Agency for International Development (USAID) in December last year estimated that the annual trade of cryptocurrencies in Ukraine is around $775 million. The research titled “Transformation of the financial sector” emphasized that digital coins should be considered as “currency valuables” and brought under regulation just like other foreign currencies.