Ukraine legalized cryptocurrencies on Thursday, even though its tensions with Russia have stirred global markets in recent weeks driven by global concerns about the possibility of war, with more than 100,000 Russian troops stationed near the Ukrainian border.
“Ukraine is already in top-5 countries on cryptocurrency usage. Today we made one more step forward: Parliament adopted law on virtual assets! This will legalize crypto exchangers and cryptocurrencies, and Ukrainians could protect their assets from possible abuse or fraud,” said Ukraine Vice Prime Minister Mykhailo Fedorov on Twitter.
Bitcoin payments have skyrocketed to Ukrainian volunteer and hacking organizations, some of which have given weaponry to government troops, according to research showing such groups earned more than $550,000 in bitcoin in 2021.
According to a blockchain researcher, digital currencies are becoming more critical as a fundraising tool for nonprofits supporting Ukraine’s government as worries of an assault by Russian soldiers massed near its border increase. However, the groups raised only $6,000 in cryptocurrency in 2020, according to reports.
Cryptocurrencies may be given and received anonymously, allowing organizations to raise funds even if banking institutions do not allow – or put strict regulations on payment transfers.
“Cryptocurrency has proved to be a robust and growing alternative (to traditional currency) – especially when it comes to donations from other countries,” said, Elliptic, a London-based blockchain analysis provider.
Ukraine intensified measures to combat money laundering in 2020, requiring ID verification for some domestic financial transactions. According to the Ukrainian National Bar Association, cross-border transfers are likewise subject to mandatory oversight.
Elliptic stated that one group, Kyiv-based Come Back Alive, began collecting funds in cryptocurrency in 2018 and earned about $200,000 in cryptocurrency alone in the second half of 2021.