Ukraine has lost substantial economic opportunities due to the lack of legal regulation of the cryptocurrency market, resulting in significant financial shortfalls. Oleksandr Bornyakov, Deputy Minister of Digital Transformation of Ukraine for IT Development and head of the Diya.City project, highlighted these losses, emphasizing the need for effective legislation to harness the potential of the crypto market.
From 2016 to 2022, Ukraine missed out on approximately $48.8 billion in personal and corporate income, along with $4 billion in tax revenue, due to the absence of a regulatory framework for cryptocurrencies, according to blockchain analyst Artem Chernetsky. This financial gap is particularly pressing given the country's current economic challenges.
In comparison, countries like Brazil and India, which faced similar issues with unregulated gray markets, have successfully integrated crypto-assets into their financial systems through well-planned legalization strategies. These efforts have led to increased tax revenues and reduced risks of crypto-related crimes.
However, Estonia's shift from being a European "cryptohub" to implementing stricter regulations has resulted in a mass exodus of companies and capital. Meanwhile, neighboring countries like Lithuania and Poland have attracted global crypto companies by offering more favorable conditions, including simplified licensing procedures, moderate taxes, and a transparent legal environment.
To prevent further financial losses and to attract necessary investments, Ukraine must pass effective cryptocurrency legislation. The proposed draft law No. 10225-1 aims to create a stable business environment, set competitive tax rates, and stop the outflow of capital. Implementing such a framework would help support Ukraine's war-torn economy and enhance its competitiveness in the rapidly evolving field of crypto-regulation.
