The Chairman of the National Securities and Stock Market Commission of Ukraine has indicated the regulator favors a decision to recognize cryptocurrencies as financial instruments. Timur Khromayev thinks it’s time to take the matter to the country’s Financial Stability Council. The point of no return has been passed, he says.
Beyond the Point of No Return
Ukraine’s securities regulator is expected to raise the question about the status of cryptocurrencies during the next meeting of the Financial Stability Council in Kiev. The chairman of the National Securities and Stock Market Commission of Ukraine, Timur Khromayev, thinks that they should be recognized as financial instruments. A decision to do that would effectively legalize digital coins in the country, although not in all of their possible functions.
“I think it is very timely to consider the recognizing of some crypto units as financial instruments during the upcoming meeting of the Financial Stability Council,” Khromayev wrote on his Facebook page. He also insisted that the body should lay out approaches to regulating crypto-related activities and initiate corresponding legislative procedures.
Timur Khromayev noted the active development of the crypto industry in Ukraine, which, in his words, has already established certain standards and rules for conducting business. He also stressed:
The point of no return is already in the past. The crypto industry is becoming an integral part of economic and financial relations.
Therefore, Khromayev thinks, some adaptation and legal recognition by financial regulators is necessary in order to solve the existing issues. The chairman of the NSSMC proposes to consider crypto assets and operations within the framework of the existing regulations, “based on principle and substance, not form.” He also called for formulating new rules in response to the dynamic development of the industry.
Khromayev thinks that the international community is far from adopting common standards. That’s why he believes that regulations will be determined by national legislations.
No Real Progress towards Regulation Yet
Three pieces of legislation have been introduced in Ukraine’s parliament since last October – the draft law “On the Circulation of Cryptocurrency in Ukraine”, the bill “On Stimulating the Market of Cryptocurrencies and Their Derivatives”, and a supplementary draft amending the Ukrainian tax code to regulate taxation of crypto incomes and profits and introduce some exemptions. No real progress towards adopting the long-awaited legislation has been reported so far.
In November 2017, the NSSMC said that the use of the term “cryptocurrency” in the new legislation was “unjustified”. According to the regulator, digital coins are the result of financial engendering and are not currencies. “Therefore, it is more expedient to use the term ‘crypto unit’,” the Commission said.
At the time, NSSMC proposed to legally define digital currencies as either financial instruments, investments assets, or goods. Its representatives noted that under the current Ukrainian legislation, cryptocurrencies could not be accepted as electronic money, foreign currencies, securities, or money surrogates.
In March this year, the executive branch of power in Kiev took steps to legalize crypto mining as an economic activity. Ukraine’s Minister of Economy ordered several ministries, agencies, and the National Bank to prepare the necessary documents to include mining in the state register of economic activities.