Central bank of Ukraine to promote “fair” crypto regulation. The National Bank of Ukraine (NBU) believes that cryptocurrencies can potentially displace the Ukrainian hryvnia. This is stated in the main principles of the NBU’s monetary policy for 2022.
The regulator recognized that innovations related to Virtual Assets (VA) can improve access to financial services. Moreover, increase competition and promote investment. Therefore, the NBU supports the creation of conditions for the development of the digital currency industry in Ukraine.
Nevertheless, the central bank sees risks in cryptocurrencies. Among them: the replacement of the national currency and the emergence of a parallel monetary turnover, which threatens financial stability; evasion of financial monitoring requirements; the flow of part of bank deposits into digital assets.
Hryvnia as the only legal tender in Ukraine
To minimize these risks, the NBU intends to prevent restrictions on the use of the Ukrainian hryvnia as the only legal tender in Ukraine.
So far, cryptocurrencies do not have a significant impact on monetary policy and financial stability due to high volatility and limited prevalence, the regulator said.
“However, with technological progress, the development and expansion of the virtual asset market, the growth of interest and awareness of individual and institutional investors, the prevalence of virtual assets may significantly increase, and their price volatility may decrease,” the NBU stressed.
The law “On Virtual Assets”
Recall that on September 8, the Verkhovna Rada of Ukraine adopted the law “On Virtual Assets”, regulating operations with cryptocurrencies on the territory of the country.
According to the Minister of Digital Transformation Mykhailo Fedorov, the daily turnover of VA in Ukraine is 1 billion hryvnia, but “all this is in the shadows.” The law is intended to bring the digital asset market into the legal plane.
The law defines VA as an intangible good that is an object of civil rights. They can be classified as secured or unsecured. Secured VA must certify property rights, in particular the rights of claim to other objects of civil rights. Cryptocurrencies, like Bitcoin (BTC) or Ethereum (ETH), are classified as unsecured.