Ukraine’s Crypto Plans Are Stuck In Limbo As Political Crisis With Russia Deepens

Ukraine’s crypto investors are becoming increasingly worried as the country faces the looming threat of a potential war with its formidable neighbor Russia. Voicing concern over the recent developments, the Ukrainian cofounder of NEAR Protocol [NEAR] Illia Polosukhin stated people will likely move their capital into safer options.

As a matter of fact, Ukraine has been positioning itself as the decentralized finance hub not just limited to Eastern Europe but the whole world. However, just five months after the announcement of the government legalizing digital financial assets and as it began working on regulating them, conflict at the border escalated, putting a halt to the country’s ambitious crypto plans.

Prior to the Russian crisis, Ukraine’s aspiration to be a crypto hub relies on its low taxes, light paperwork, and a surplus of skilled developers, a local tech economy that it claims would attract foreign investment. All that is now heading towards an uncertain future due to the ongoing geopolitical situation.

However, as per sources, Ukraine’s deputy minister of digital transformation, reassured that the country will remain crypto-positive despite the current situation.

Ukraine major crypto push

On September 9, 2021, the Ukrainian Parliament adopted a law that aimed to legalize and regulate cryptocurrency.

Unlike El Salvador’s adopting bitcoin as legal tender, Ukraine’s crypto law does not facilitate bitcoin as a form of payment nor does it treat equivalent to the country’s national currency- hryvnia.

By 2022, the Eastern European nation plans to open the cryptocurrency market to businesses and investors, according to the Kyiv Post. Several top state officials had flown to San Francisco to meet investors and venture capital funds in Silicon Valley.

Last year, President of Ukraine Volodymyr Zelenskyy visited the U.S where he spoke on Ukraine’s budding “legal innovative market for virtual assets” as a selling point for investment, and Minister of Digital Transformation Mykhailo Fedorov said the country was modernizing its payment market so that its National Bank would be able to issue digital currency.

But the current border crisis cast an uncertain future for the crypto investors in Ukraine. Echoing similar sentiment, Polosukhin stated,

“There was foreign investment happening. Now it may contract to some extent. The way all of this is positioned in Western news is not helping.”