Ukraine Unveils Legalization Plan for Crypto by 2025, Without Tax Benefits

Ukraine is preparing to legalize cryptocurrency in the first quarter of 2025. This news was announced by Danylo Hetmantsev, head of the Ukrainian parliamentary committee for finance, tax and customs policy, during the ‘Domestic Investment Opportunities’ forum organized by Ekonomichna Pravda. However, there is a significant caveat: there will be no tax exemptions for crypto investments.

Timeline and Legislative Process

Hetmantsev revealed that a bill, developed in close cooperation with the National Bank of Ukraine and the International Monetary Fund (IMF), is nearly complete. He expects the draft to be ready for approval after the New Year. This follows a significant step in November 2023, when the Ukrainian parliament had already introduced legislation for taxing virtual assets. The approval of this new bill will be the final piece of the legal puzzle for crypto in Ukraine.

Simultaneously, Russia has submitted a new crypto law aimed at regulating crypto transactions, thereby also taking steps towards a regulated crypto environment.

With this legalization in 2025, Ukraine will join countries such as the United States, Canada, Japan, Germany, Australia, and Switzerland, which have already implemented a regulatory framework for cryptocurrency.

No Special Tax Benefits

The decision not to offer tax exemptions for crypto profits reflects a cautious and realistic approach. According to Hetmantsev, profits from crypto will be taxed in the same model as securities, and only when they are converted into traditional currency. This approach follows international best practices and prevents digital assets from enabling tax evasion.

Ukraine’s Role in the Crypto World

Ukraine has already proven itself as a prominent player in the crypto world. In 2022, the law “On Virtual Assets” was adopted, which legally defined and recognized cryptocurrency as an asset class. The Ministry of Digital Transformation is actively working with international blockchain companies and tech giants to develop a robust digital economy.

During the early stages of the Russian invasion in 2022, Ukraine embraced crypto donations, demonstrating the usability of crypto in crisis situations and raising millions for defense and humanitarian efforts.

As we approach the first quarter of 2025, all eyes will be on Ukraine as the country tackles the challenges and opportunities to become a fully crypto-legal nation, without the tax benefits some might have hoped for.