Ukraine has become the latest country to legalize cryptocurrency following increasing tensions with Russia. Ukraine’s move was largely influenced by the large crypto donations received by volunteer groups and Ukrainian hackers.
Despite warnings from the IMF and central banks across the globe on using digital assets, the Ukrainian Parliament went ahead to legalize virtual currencies. Vice Prime Minister Mykhailo Fedorov said that legalizing virtual currencies will bring them into the mainstream and out of its shadows.
Legalization Will Safeguard Ukrainian Assets
Mykhailo Fedorov said Ukraine is amongst the top five countries based on cryptocurrency transactions. The Parliament thought what was best by passing a law on virtual assets, giving the citizens permission to use digital assets legally.
Crypto firms will also benefit from the new law, as they can now operate in the country. The Vice Prime Minister tweeted that legalizing cryptocurrencies would protect citizens’ assets and the general population from abuse or fraudulent activities.
Recently, Ukraine made adjustments to its cash transfer policy and cross-border payments to reduce money laundering and other illicit financial activities. According to reports, all local cash transfers would require ID verification, while inter transfers would be subjected to compulsory monitoring.
BTC Donations Jumps Amidst Ongoing Tensions
Yet again, cryptocurrency has proven to be a solid alternative to fiat when it comes to matters involving donations. Recall that last year, a Yemeni raised money in crypto donations to purchase food supplies for the displaced and poor citizens in the war-ravaged after her online donation campaigns failed.
BTC donations to volunteer groups and hackers have jumped significantly since Russian troops first barricaded the borders of Ukraine. Donors choose crypto donations over traditional channels because of fear of international organizations and monetary units intercepting the funds.
According to BTC researcher Elliptic, these groups have received more than $550k worth of virtual currencies. Aside from cash, these groups have received donations in equipment, with part of them given to the government forces.
Cryptocurrency may have its advantages, but not to the eyes of the IMF and other monetary institutions that have constantly issued warnings about using virtual currencies. The IMF has been in opposition since cryptocurrency became popular, stating that CBDCs are safer and pose fewer risks.
The Reserve Bank of India has also been vocal in its opposition to the use of cryptocurrencies. The RBI once called this digital asset class a danger to a country’s monetary policy. The apex bank also stated that they are not better than Ponzi schemes.
This isn’t the first time the country had attempted to make cryptocurrency official. Last year, the Parliament drafted a law on digital assets which aimed to legalize their use within the country’s jurisdiction. Unfortunately, the bill was disapproved by President Zelensky.