Ukraine has been a lot in the news lately, with all the talk focused on the potential inviting by Russia. However, there’s one Ukraine-related news that might have slipped past you – the country has legalized digital currencies earlier this week.
The story goes that in its final reading, the Ukrainian parliament passed the Law of Ukraine on Virtual Assets that made Bitcoin and other cryptos legal in the country.
The Law of Ukraine on Virtual Assets
“The new law is an additional opportunity for business development in our country. Foreign and Ukrainian crypto companies will be able to operate legally…”said the minister of digital transformation Mykhaylo Fedorov.
The bill was passed on Thursday, February 17, 2022, after more than 270 parliament members voted in its favor. A similar bill was supposed introduced five months ago, but Ukrainian President Volodymyr Zelensky. His reasoning at the time was that the country wasn’t able to afford a special regulatory body for cryptocurrencies.
Zelensky returned the bill to the parliament, together with advice on how to improve it. His suggestions were accepted by the MPs, who then went on to pass the adjusted bill.
BTC Plummets Amid Ukraine-Russia Tensions
With US President saying that a large-scale war between Russia and Ukraine is “imminent,” inflation rates started to increase around the world. Stock markets suffered heavy losses, while Bitcoin lost 7% of its value overnight.
At the moment of writing, Bitcoin stands at $40,496, after dropping about $4,000 over the last couple of weeks. Truth be told, even before the crisis started, the BTC price wasn’t much higher. In fact, since recording its highest value last November – $63,272 – Bitcoin’s been steadily decreasing in price.
Russia to Fight Sanctions with Bitcoin, Analysts Say
“If sanctions hit Russia and hit Russia heavily, there is no question that they’re going to go into every stablecoin. They’re going to go into bitcoin,”said analyst Don Kaufman.
Financial experts agree that if the West hits Russia with heavy sanctions, the Kremlin is likely to respond by embracing Bitcoin. In turn, it could mean a possible start of a bullish run for Bitcoin and other cryptocurrencies.
The theory is that when there are problems with fiat-based traditional markets, people turn to alternatives. In 2022, Bitcoin is the main alternative to traditional systems, meaning that in the case of economic sanctions, Russia’s only road to recovery would be the one leading to cryptos.
Still, not everyone in Russia seems to be in favor of going crypto. In fact, the Bank of Russia is calling for a ban on cryptocurrencies. However, at the same time, the Russian Ministry of Finance seems to be looking into the possibility of making cryptos legal and regulated.