Ukraine to Regulate Bitcoin Exchanges Under Proposed Law

New legislation introduced in Ukraine would bring the local cryptocurrency ecosystem under the oversight of the country's central bank.

The bill, first filed on October 6 according to public records, outlines the rules for exchange services, including taxation and data redemption requirements. Notably, the bill calls for cryptocurrencies to be taxed as a kind of property, mirroring the approach taken by the U.S. Internal Revenue Service, which released a similar determination in 2014.

It also includes a section on cryptocurrency mining – the energy-intensive process by which transactions are added to a blockchain, creating new coins as a reward – stating that the proceeds are also subject to taxes.

The legislation's introduction is notable development, given that in August, the country's central bank hinted that it may move to regulate cryptocurrency activities in Ukraine.

If the bill is passed and signed into law, the National Bank of Ukraine would have two months from that date to create guidelines for exchanges. Further, it mandates that the Ukrainian government "ensure that the ministries and other central executive bodies bring their normative legal acts into compliance with this law," according to a translation.

It remains to be seen what changes will be made as the bill moves through the Verkhovna Rada, Ukraine's national legislature. Several committees in the unicameral parliament are set to weigh in on the measure, according to public records, with the Financial Policy and Banking Committee taking a leading role.

Another possible factor in the process is that, as previously reported, several members of the legislature have disclosed significant holdings in bitcoin.

Editor's Note: Some statements in this article have been translated from Ukrainian.

Verkhovna Rada image via Sharomka/Shutterstock