Key Takeaways
- Ukraine plans to legalize Bitcoin by early 2025.
- Bitcoin transactions will be taxed under standard capital gains rules.
- The legislation prioritizes fiscal oversight and AML compliance.
Ukraine is set to legalize Bitcoin by early 2025, according to Daniil Getmantsev, head of the tax committee of the Verkhovna Rada. The draft bill under development will regulate digital assets without offering tax incentives, applying standard taxation rules akin to securities trading.
The legislation, expected to be ready for parliamentary review in the first quarter of 2025, is being crafted in collaboration with the National Bank of Ukraine (NBU) and the International Monetary Fund (IMF). Its aim is to create a transparent legal framework that supports Anti-Money Laundering (AML) compliance while ensuring financial stability.
Tax treatment & regulatory approach
Profits from Bitcoin transactions will be taxed as capital gains when converted into fiat currency, reflecting the government’s cautious approach to prevent tax evasion. Getmantsev emphasized that offering tax breaks could lead to exploitation and undermine the fiscal benefits of legalization.
Current Bitcoin usage & regional impact
The move comes as cryptocurrencies, including Bitcoin, play a vital role during Ukraine’s conflict with Russia, enabling humanitarian aid, financial support, and cross-border transactions amid banking disruptions. Chainalysis reported that decentralized finance (DeFi) in Eastern Europe processed over $499 billion in digital assets from July 2023 to June 2024.
As Ukraine prepares to legalize Bitcoin, it joins other nations in Eastern Europe and beyond that are embracing digital asset regulation to enhance financial inclusivity and stability.
