Cryptocurrencies Legalized in Ukraine: What Benefits Asset Owners Will Receive.

Ukraine is preparing a draft law that will allow cryptocurrency owners to officially declare their assets and pay tax at a preferential rate without the obligation to disclose the sources of their funds. This move aims to legalize the crypto market and bring it into the legal field, but it raises discussions about transparency and its impact on the economy.

'This law is no longer for the economy of Ukraine and not for Ukrainians; it is for those who already have large cryptocurrency assets and want to legalize them. They understand that buying expensive things is very difficult now, so they are trying to protect their interests through the law. Currently, cryptocurrency activities are not prohibited, but they are also not officially legalized,'

— explains economist Eduard Karajia.

This approach contributes to transparent and civilized regulation of the crypto market in Ukraine and opens the way for further development of the digital economy.

Risks for the Economy

Supporting transparency and control over financial flows is extremely important for the state, as taxes are a key source of budget revenues. The banking system remains the primary channel for the movement of money in Ukrainian realities, while cryptocurrency remains an opaque area, complicating the tracking of the origin of funds and their movement.

'So far, the financial system operates through banks, where income and expenses are recorded and taxed. With cryptocurrency, everything is different — it is unclear where money comes from and where it goes, and most transactions are not taxed. The more such transactions there are, the less tax revenue the economy receives,'

— notes the economist.

Global Experience in Ukraine

Global experience shows that regulating cryptocurrencies contributes to controlling this segment of the economy, without blocking its development and innovations. Ukraine should also take global trends into account to attract investments and develop new sectors.

'There are different approaches in the world: some countries are already taxing cryptocurrency, while others are just moving in that direction. There is no point in banning cryptocurrency in Ukraine — the world is moving towards legalization and regulation, and sooner or later we will also have corresponding laws. However, the tax on cryptocurrency must be real, just like for everyone else — not 5%, but a minimum of 18% income tax and 5% military levy, then everyone will be on equal terms,'

— reveals expert Eduard Karajia. The plan for the legalization of cryptocurrencies in Ukraine foresees the possibility for owners of digital assets to declare them, pay tax, and keep the origin of funds unknown. This can pave the way for a more transparent and developed cryptocurrency market, but it has its risks for the economy related to lower taxation and lack of control. Nevertheless, the principle of tax equality for all participants is key in considering such legislation.