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‘Legalization’ Coming for Cryptocurrency in Ukraine – And So Is the Taxman

‘Legalization’ Coming for Cryptocurrency in Ukraine – And So Is the Taxman 101
Source: iStock/Gwengoat

A Ukrainian minister has stated that the government wants to grant legal status to cryptocurrencies – moving them out of their current “grey area.” But the government’s motive appears to be primarily financial, as the minister suggested taxing both miners and cryptocurrency traders.

Per a report from media outlet Liga, Ukraine’s Ministry of Digital Transformation Alexander Bornyakov stated,

“People who [deal with cryptocurrencies] should come out of the gray area they are currently operating in and start paying taxes.”

Bornyakov suggested that cryptocurrency “legalization” was the way forward for the industry, as although cryptocurrencies are not illegal in Ukraine, they do not have any legal status either. Instead, as is the case in many countries, the state simply does not recognize them as legal tender.

The minister spoke about the eventuality of the state “earning [money] from [crypto] miners.” He suggested that the legalization of cryptocurrencies would also pave the road to prospectively taxing cryptocurrency traders. (Meanwhile, as reported, Russian bankers and their lawyers appear to have uncovered creative legal loopholes that could let tax authorities in the country tax crypto holders – without even having to change the country’s taxation code.)

The country’s new government has repeatedly pledged to transfer its public registries and systems of document issuance to blockchain-powered platforms.

Per the same media outlet, Bornyakov’s cryptocurrency legalization plans are part of a wider plan that would see blockchain technology play a key role in digitizing the government’s operations.

For example, as reported by Cryptonews.com in 2018, the deployment of blockchain technology in partnership with a state-run company allowed to boost the proceeds from auctions of seized property and land leases in Ukraine.

Meanwhile, an undated video surfaced on social media, showing Alexander Lukashenko, the president of the northern neighbor of Ukraine, Belarus, discussing a possibly to use excess nuclear power to mine Bitcoin:

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