Ukraine’s central bank has withheld support for a crypto bill advancing to its second reading, calling for authority to restrict foreign tokens when necessary and stronger safeguards for market access.
According to CoinDesk, the National Bank of Ukraine (NBU) said that Bill No. 10225-d, which aims to legalize and regulate crypto assets, does not address its main concerns. The bank argues that the current text could put the country’s monetary sovereignty and financial stability at risk.
The NBU supports regulation based on the European Union’s MiCA framework and International Monetary Fund recommendations. However, it says it received the latest text shortly before a parliamentary committee approved it for a second reading and did not have enough time to review the amendments. The bank also said it did not consider the drafting process sufficiently transparent.
Request for authority to restrict foreign tokens
At the heart of the bank’s objections is the possibility that tokens not supervised in the countries where they are issued could enter the Ukrainian market. The NBU believes some assets could function like electronic money and be used to avoid obligations that apply to local assets.
The bank is therefore seeking authority to assess foreign tokens and restrict their use when necessary. This request is part of a dispute over the bill’s supervisory powers, rather than a new ban on foreign tokens.
How many crypto platforms will be allowed to operate?
The NBU said it had accepted a compromise to allow three crypto trading platform operators, initially selected through a competitive process. The latest text, however, leaves the number of operators permitted to operate during the first five years to the discretion of Ukraine’s securities regulator.
According to the NBU, the authority granted to this body, which is expected to be the crypto market’s primary regulator under the bill, could lead to market concentration among a small number of operators and create a risk of corruption. The central bank wants further changes to the text before the legislative process moves forward.
Tax draft includes a 5% transitional rate
The updated bill proposes a 5% transitional tax on existing crypto assets through the end of 2028. Crypto-to-crypto transactions are explicitly exempt from tax. The initial draft had proposed applying an 18% personal income tax and a 5% military tax to crypto gains.
Ukraine has previously tried to establish a legal framework for crypto. The virtual assets law signed by President Volodymyr Zelenskyy in March 2022 did not take effect because the related tax legislation was not amended.
Not investment advice.