Ukraine central bank opposes crypto bill over monetary sovereignty risks

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Ukraine bank opposes crypto bill

Highlights

Ukraine's central bank opposes draft law No. 10225-d, warning it leaves monetary sovereignty and financial stability risks unresolved, especially regarding unsupervised foreign-issued tokens.
The bill makes the NSSMC the main crypto market regulator, introduces a 5% transitional tax rate on existing crypto assets until end-2028, and exempts crypto-to-crypto trades from taxation.
The draft allows the securities regulator to determine the number of licensed crypto platform operators in the first five years, raising NBU concerns over market concentration and corruption risks.

Concerns over oversight and market structure

As reported by CoinDesk, the National Bank of Ukraine says draft law No. 10225-d does not resolve key concerns raised in discussions with lawmakers, regulators and crypto industry representatives. The central bank says it supports regulation aligned with the European Union's MiCA framework and International Monetary Fund recommendations, but argues the current version still leaves risks to the financial system.

The NBU says it received the final version of the bill late Tuesday, giving it little time to review changes before a parliamentary committee approved it for a second reading. It also says the drafting process is "not sufficiently transparent."

The central bank warns that foreign-issued tokens could enter the Ukrainian market even if they are not supervised in their home jurisdictions. It says some of those assets could function as electronic money, creating risks for monetary sovereignty, price stability, financial stability and broader economic security.

The NBU wants authority to assess such tokens and restrict their use when needed, similar to its powers over tokens issued in Ukraine. It also says foreign crypto assets could allow issuers or users to bypass requirements that apply to comparable Ukrainian assets.

Another dispute concerns market access. The central bank says it accepted a compromise under which only three crypto trading platform operators would initially be admitted through a competitive process, but the final draft instead leaves the number of operators during the first five years to the discretion of Ukraine's securities regulator, the NSSMC. The NBU says that approach raises risks of market concentration and corruption.

Tax regime and wider implications for Ukraine's crypto plans

Under the bill, the NSSMC would serve as the main regulator of Ukraine's crypto market. The initial draft applies the standard 18% personal income tax and a 5% military levy to crypto gains, but the revised text introduces a 5% transitional tax rate for existing crypto assets until the end of 2028 and explicitly exempts crypto-to-crypto trades from taxation.

Ukraine has already tried to legalize crypto. President Volodymyr Zelenskyy signed a virtual assets law in March 2022 after rejecting an earlier version, but that legislation never takes effect because it depends on amendments to the tax code.

Lawmakers have also proposed allowing the central bank to hold crypto in its reserves, while authorities move $8.3 million in seized crypto in June amid discussion of a strategic reserve. The NBU's call for further revisions now adds fresh uncertainty to the country's effort to establish rules for digital asset trading, supervision and taxation.

Sovereign borrowing risks are rising as geopolitical tensions and sustained fiscal expansion collide with a higher-interest-rate environment, our publication previously noted. We highlighted that persistent shocks—such as the Russia-Ukraine war and the conflict in the Middle East—can keep energy and food inflation elevated, strain public finances, and worsen refinancing conditions, with emerging and frontier markets particularly exposed due to narrower revenue bases and higher debt-service burdens.

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