How do they plan to regulate cryptocurrencies in Ukraine?

The Verkhovna Rada of Ukraine currently has two draft laws on regulation of the cryptocurrency market. (No. 7183 and No. 7246) Moreover, the approaches and principles of regulation in them are radically opposite. It is still unclear which of these bills the deputies will support, because neither one nor the second has even gone through the review procedure in the commissions.

In Ukraine, judging by the bills submitted to the Verkhovna Rada, there are two approaches to legalizing the cryptocurrency market. 

Idea one: cryptocurrency transactions and income will be taxed on a general basis, depending on the status granted to digital coins. 

Document 7183 states that cryptocurrency is a “method of exchange.” Consequently, it is recognized as a commodity, and transactions with it are subject to the general provisions on the agreement of barter (or, more broadly, purchase and sale). Alternative bill No. 7183-1 interprets cryptocurrency as a financial asset. In these cases, legislators agree that the income of cryptocurrency exchanges should be subject to taxation on a general basis. In addition, according to project 7183-1, such exchanges and exchangers must, at the expense of the amount payable to the client for the cryptocurrency purchased from him, pay an additional fee for compulsory state pension insurance.

The second idea is to normalize the cryptocurrency market on the principles of liberalism.

This will be done to “create the preconditions for additional investment flows to Ukraine,” as noted by the authors of the amendments to the Tax Code no. 7246. This project provides for the exemption from taxation of the profits of enterprises (except for financial institutions) received from the purchase and sale of cryptocurrencies, and not to include income from transactions with them in the total monthly (annual) taxable income of the taxpayer and, finally, not to recognize transactions with digital coins as an object of taxation at all. 

The bills that are in the Verkhovna Rada provide that cryptocurrency exchanges in Ukraine will be required to monitor transactions and identify users. 

Moreover, project No. 7183 directly states that “the exchange of cryptocurrency for electronic money, financial values, and securities is carried out exclusively by a cryptocurrency exchange.” 

The alternative bill puts forward requirements for crypto exchanges, such as the status of a financial institution, mandatory licensing, the presence of an authorized capital of UAH 5 million, and at least 51% ownership by Ukrainian citizens... The last point is controversial because it cuts off the country from foreign exchanges, and therefore from possible capital flows from the global cryptocurrency market. It is also planned that it will be possible to exchange digital coins for one another or for regular money only through crypto exchanges or cryptocurrency exchange points.

All this falls within the framework of control. However, even such norms are half-hearted, because they do not in any way regulate the use of cryptocurrency wallets, which are precisely intended for “digital” purchases and payments.

Bill 7183 provides for taxation of mining operationson a general basis; two other documents declare stimulation of the production of cryptocurrencies. 

Project 7183-1 explains that the purpose of such support is the development of IT technologies, payment infrastructure, increasing employment and, of course, attracting investment. And we are talking, in particular, about lower electricity tariffs for miners - the main item of their current expenses. “Preferential taxation” is also mentioned, but without specifics. 

But bill 7246 directly excludes cryptocurrency mining operations from the list of taxable items. Legalization should protect miners from security forces who from time to time raid their computer “farms” with accusations of issuing “monetary surrogates” (money substitutes).

Which bill and when will it be adopted?

We place bets, gentlemen?

According to https://www.depo.ua