Someone used the term “legalization of cryptocurrencies in Ukraine.” And all this at a time when Salvador had decided to grant BTC legal tender status. Parallels between the two countries have been drawn by several websites at the risk of causing misunderstandings.
Laws in Ukraine and regulation of cryptocurrencies in Russia
What happened in Ukraine has little to do with the case of the South American country. Instead, it has a number of important similarities to what happened just a year earlier in neighboring Russia (July 2020), when a federal law (259-FZ) was passed.
The content of the provisions of the two countries is not very different: 26 articles for Ukrainian law, 27 for Russian.
When reviewed, the two laws appear to be designed to provide a set of clear definitions of the various concepts of cryptocurrencies, digital assets, and wallets.
They also provide a range of powers to regulators; indicate the transactions that financial intermediaries can legitimately carry out with cryptocurrencies and digital assets; sets out requirements and authorization mechanisms for entities wishing to offer cryptocurrency services.
They may also impose disclosure requirements and rights on persons operating in the ecosystem according to their different roles (investors, service providers and the public) and set rules and restrictions for the purpose of combating money laundering.
Comparison of legislation
There are two texts of the law, which aim to regulate the operation of economic values circulating through cryptocurrencies, seek to establish security rules and seek to keep this area in the private sphere. These two laws represent a number of significant similarities in structure, although with understandable differences in the wording of the individual provisions.
Despite many similarities, the adoption of the law in the Russian Federation did not cause the same uproar as the adoption of a similar measure in Ukraine.
When we look at these two pieces of legislation, it is quite clear that the aim of the legislators of both countries was to direct financial activities in cryptocurrencies to a sphere in which some form of control can be exercised, but without their use being radically illegal. This leads to a system of authorizations, transparency obligations and operator identification.
Both laws contain explicit and reassuring legitimacy of bank intermediaries to operate exchanges and transfers between fiat currencies and cryptocurrencies. So it seems no coincidence that Russian banking giant Sberbank, just a few months after the passage of Russian law, announced the launch of its own Sbercoin token.
In these two countries, it seems to be an attempt to “tame” the digging stallion, the cryptocurrency market, to bring him, properly tamed, along a kind of guided path to the pastures of traditional finances.
This is a strategic economic choice that is far from what one sees in El Salvador, which has accepted BTC as legal tender. It is not even remotely comparable, both in terms of purpose and in terms of concrete effects, with the case of laws passed in Ukraine and previously in Russia.
At this point, suffice it to say that the whole operation in El Salvador seems to be aimed at achieving a significant increase in national GDP. With acceptance BTC As the legal currency of the state, there is a significant reduction in the cost of commissions from remittances from abroad of many workers who emigrated to their native families.
This is a very important part of the national economy and once the cost of fees for the various transfer services has been passed on to the actual beneficiaries, all these resources will be put back into circulation in the national economy, leading to an estimated GDP increase of around 1%.
Everything that happens, from Russia and Ukraine to the new reality of the state of Salvador, reflects an evolutionary scenario in which the pragmatic legislator decides to find a way to put the reins in a new market and offer some legitimacy in exchange for a certain amount of supervisory and control capacity.
By monitoring this phenomenon and its future development, Europe can anticipate the creation of possible regulatory frameworks according to similar formulas.
Hand on heart. How do you think the main Western economies and their regulatory systems will develop in the future? Towards a South American model where the law takes on a noble cypherpunk tinge?
Or rather towards a model that could resemble the Russian and Ukrainian ones? A model aimed at the gradual erosion of more liberal features of cryptocurrencies in order to facilitate their direct process with the support of the political establishment.