Ukraine’s New President Moves to Legalize Cryptocurrencies to Help Boost Economy

After winning a surprise election earlier this year, new Ukranian president Volodymyr Zelensky is looking to modernize the government and use new technology to fight corruption. With the help of the 28-year-old Deputy Prime Minister for Digital Information Mikhail Fedorov, the president hopes to legalize cryptocurrencies and implement a blockchain-based voting and government services platform.

Cryptocurrencies are not currently illegal in Ukraine but don’t benefit from any specific legal or regulatory framework to support them. This makes it difficult for citizens to deal with them securely and productively since many financial institutions and retailers are unable to or unsure how to accept them. In addition to empowering crypto enthusiasts, Zelensky also hopes to give the Ukranian economy a boost by taxing cryptocurrency activities such as mining and trading.

His plans continue the work of Ukraine’s previous government which laid out a two-tiered plan to have a fully-fledged cryptocurrency framework ready by 2021. The framework includes developing a support system for custodial services and “special legislative acts on the regulation of the use of virtual assets, smart contracts and tokens” for initial coin offerings (ICOs).

Alex Alexandrov, founder, and CEO of popular cryptocurrency payment gateway Coinpayments and the AI-enhanced blockchain VELAS, recently spoke to Zelensky about his plans.

“Technology is now going to evolve and improve transparency. So blockchain can bring trustworthy systems to the economy, which will help fight and control corruption,” said Alexandrov. “And as Mr. Zelensky has expressed, there’s a very big interest in allowing systems which will basically assist voting on the blockchain for the next election that will avoid permitting voting fraud, and have a higher turnout of participation and more transparency.”

A risk that could pay off

Zelensky sees legalization as key to ending corruption in both the current economic landscape and that associated with cryptocurrencies. Blockchain technology offers the perfect solution due to its transparent, immutable and incorruptible nature. Fedorov believes current systems could be upgraded to match the easy and efficiency of web-based services like Uber and Airbnb.

Mikhail Vidyakin, acting Director of Reform Strategy at Ukraine’s central bank, recently commented on Facebook at the necessary legislation should be adopted “in the shortest possible time.” Some of the key challenges the new government faces with regards to blockchain legislation include the implementation of the Financial Action Task Force (FATF) standards to combat money laundering and terrorist financing.

While Bitcoin may have come into being over a decade ago, blockchain and cryptocurrency remain nascent sectors so Ukraine is taking a leap of faith with its ambitious plans. However, should they prove to be successful, the country will pave the way for governments of the future to implement blockchain services across many industries.

There is no doubt that blockchain will play a significant role in the future of the world’s financial, political and environmental landscapes. The way in which it is initially implemented by early adopters will be key in ensuring it continues to be used in a positive and productive manner.