Ukraine Crypto Law Could Provide Economic Lifeline

The newly established legislation legalizing cryptocurrencies in Ukraine could mean much more than just allowing citizens to trade digital assets.

Earlier this week, Ukraine’s President signed a virtual assets law establishing a framework for cryptocurrencies within the war-torn country. The move comes as the country’s need for capital escalates as it faces increasing pressure from invading forces.

The new crypto legislation could pave the way for faster and more efficient monetary flows in the country. However, Ukraine has yet to go all-in on crypto as El Salvador has done by legalizing Bitcoin as tender.

That could be just a matter of time, however. Ukrainian vice prime minister and minister of Digital Transformation, Mykhailo Fedorov, told Tech Crunch:

“So we strive to be as friendly to virtual assets as possible. And we are continuing this effort during wartime as well,”

A crypto solution

Under the new crypto framework, digital asset exchanges such as the country’s first — Kuna — will be able to convert cryptocurrencies into fiat without regulatory hassles. Before the new legislation, Ukrainian crypto exchanges were limited to crypto-only conversions.

The newly opened fiat on and off-ramps will make it easier for citizens, companies, and governmental organizations to freely convert to and from digital assets adding more liquidity to the flow of capital to and from the country.

Additionally, Ukraine has partnered with the FTX crypto exchange to aid in the conversion of crypto contributions into fiat to deposit at the National Bank of Ukraine.

The crypto movement in Ukraine is garnering worldwide attention. On March 17, Wired magazine ran a piece declaring that the country’s Digital Ministry is a “department run by savvy tech “freaks” that has become a surprise defense against Russia.”

Donations near $100M

Deputy Minister of Digital Transformation, Alex Bornyakov, has been pushing the crypto relief effort as digital donations continue to pour in.  

“We believe this is the new economy, this is the future, and we believe this is something that is going to boost our economy.”

Everstake, FTX, and Kuna have partnered with the Ukrainian government to launch a donations platform that accepts a number of different cryptocurrencies including SOL, DOT, DOGE, ADA, LUNA, and XMR.

At the time of writing, the platform had received $55 million in donations, less than five days after it launched on March 14.

According to Merkel Science, which counts crypto donations to several sources including the government, Ukraine DAO, ComeBackAlive, Binance, and the Unchain Ukraine Fund, there has been a total of $96.6 million donated as of March 17.