Ukraine Parliament Approves First Reading of Crypto Legalization Bill

TLDR

• Ukraine’s parliament passed a bill to legalize and tax cryptocurrencies, including 18% income tax.
• The new crypto taxation bill proposes a 5% military tax on digital asset profits.
• Ukraine ranks 8th globally in crypto adoption, making the bill a key economic move.
• The bill also introduces a temporary 5% tax rate on fiat conversions in its first year.

Ukraine’s parliament has taken a significant step toward legalizing cryptocurrencies with the passage of a new taxation and regulation bill. On Wednesday, the Verkhovna Rada passed the bill’s first reading with overwhelming support, with 246 out of 450 lawmakers voting in favor. This bill, known as the “Crypto Legalization and Taxation Bill,” aims to provide a clear regulatory framework for the cryptocurrency market in Ukraine.

The bill introduces an 18% income tax and a 5% military tax on digital asset profits, a move designed to regulate the rapidly growing crypto economy in the country. Furthermore, it offers a temporary 5% tax on fiat conversions for the first year, providing an incentive for individuals and businesses to engage in legal crypto activities. This proposal has been hailed as a step toward bringing transparency and structure to Ukraine’s cryptocurrency market.

Ukraine Proposed Tax Rates and Regulatory Framework

The tax rates set out in the bill align with recommendations from Ukraine’s financial regulators, who have sought to formalize the cryptocurrency space. The bill proposes an 18% income tax on crypto earnings, which is relatively competitive compared to other countries. Additionally, it introduces a 5% military tax on digital asset profits, designed to support national defense efforts.

This legislation also sets a preferential 5% tax rate on fiat-to-crypto conversions in its first year, creating a more attractive environment for businesses and individuals looking to trade or invest in digital assets. These measures are expected to position Ukraine as a more crypto-friendly jurisdiction, attracting global investors and crypto companies.

While the tax rates have been outlined, some details of the bill remain unclear, including which regulatory body will oversee the implementation of these rules. Speculation suggests that either the National Bank of Ukraine (NBU) or the National Securities and Stock Market Commission (NSSMC) will take responsibility for monitoring and enforcing these regulations.

Ukraine Crypto Adoption and Global Position

Ukraine has quickly emerged as one of the leading countries in terms of cryptocurrency adoption. According to Chainalysis, Ukraine ranks 8th globally in the 2025 Global Crypto Adoption Index.

The country has been at the forefront of embracing blockchain technology, particularly in the decentralized finance (DeFi) sector. It has also been active in developing its own digital asset reserves, with the government seeking to leverage crypto as a tool for financial growth.

Ukraine’s high level of crypto adoption is partly due to a tech-savvy population that is open to adopting digital technologies. This new bill is expected to help formalize the crypto economy, making it easier for individuals and businesses to engage in the sector while ensuring compliance with national laws. The bill is part of a broader effort to integrate blockchain and cryptocurrency into the country’s economic framework.

Future Developments and Potential Changes

Although the bill has passed its first reading, it is still subject to changes before its second reading. Lawmaker Yaroslav Zhelezniak, who announced the vote, stated that several modifications could be made to the bill during the next stage of the legislative process.

The introduction of a new regulatory framework for cryptocurrency could also bring further clarification on the bill’s enforcement.

The crypto community in Ukraine has welcomed the move, seeing it as a positive step toward greater legal clarity. However, some stakeholders remain cautious, awaiting further developments and regulatory guidance. The final passage of the bill would likely make Ukraine one of the most crypto-friendly countries in Europe, potentially attracting more crypto-related investments and innovations.

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