Legalization of cryptocurrency will provide an additional source of filling the state budget – economist

Legalization of cryptocurrency in Ukraine may be an additional source of replenishment of the state budget, as transactions with digital assets, after the adoption of relevant legislative changes, will be taxed. This opinion was expressed in an exclusive commentary to UNN by the head of the Committee of Economists of Ukraine, Andriy Novak.

“If cryptocurrency is legalized in Ukraine, accordingly, transactions with it will be taxed, then the Ukrainian budget will receive an additional source of revenue,” Novak said.

He added that it is currently difficult to estimate the potential amount of annual budget replenishment from crypto transactions. Despite the fact that Ukrainians are among the most active users of digital currency in the world, given the population and the ratio of amounts to the country’s GDP, the cryptocurrency market is quite volatile.

“For example, if in the last few weeks the same bitcoin has collapsed by more than 20%, then it is very difficult to predict what will happen with bitcoin and other cryptocurrencies. Even for one quarter, not to mention a year or some medium-term perspective,” Novak said.

Despite this, according to the economist, the legalization of cryptocurrencies in Ukraine may still become an additional source of budget replenishment. 

Let’s add

Fintech expert and co-founder of the first fintech ecosystem in Ukraine, Concord Fintech Solutions, Olena Sosiedka, in a commentary to UNN explained that the lack of clear legislation in Ukraine in the field of virtual assets leads to a number of negative consequences. The first is legal uncertainty. After all, companies and investors face a lack of clear rules, which ultimately hinders market development.

No less important consequence, according to her, is also the lack of protection of rights. “Currently, cryptocurrency users in Ukraine remain without mechanisms to protect against fraud,” Olena Sosiedka explained.

She added that due to the lack of legal regulation, the state loses economic opportunities, because now Ukraine has limited investment inflows and the development of fintech startups.

In addition, according to her, the legalization of cryptocurrencies will create favorable conditions for attracting foreign investment in the IT sector and fintech startups. This, in turn, will create new jobs, increase the country’s competitiveness and provide citizens with access to new financial instruments.

The fintech expert notes that the adoption of the law on cryptocurrencies will also allow the development of innovations, in particular, legalization will contribute to the development of blockchain technologies and the fintech sector.

Let us remind you

In February, it was reported that the virtual currency will soon be legal in Ukraine. The head of the National Commission on Securities and Stock Market, Ruslan Magomedov, in a commentary to the UNN correspondent, said that the draft law has already been sufficiently processed and can and should be adopted by the deputies of the Verkhovna Rada. The purpose of legalization is to launch the virtual asset market.

The head of the subcommittee on the functioning of payment and information systems and the prevention of legalization (laundering) of proceeds of crime, Olga Vasylevska-Smaglyuk, said that the Verkhovna Rada plans to adopt a draft law on taxation of crypto assets by the end of this year. This will allow tracking transactions with cryptocurrencies, in accordance with European regulations.