The National Bank of Ukraine is to consider the legal status and regulation of digital currencies such as Bitcoin by the end of August 2017.
The Central Bank has issued a press release confirming that the issue of regulating digital currencies will be considered at the next meeting of its Financial Stability Board, to be held by the end of the month.
Currently, digital currencies such as Bitcoin do note have a definite legal status in Ukraine. According to the Bank, this is in part due to the lack of a consolidated approach and management method of such currencies by other countries around the world.
It highlights that different countries classify digital currencies differently. For example, the EU legislation states that digital currencies such as Bitcoin are,
“a digital representation of value, not issued by a central bank, credit institution or e-money institution, which in some circumstances can be used as an alternative to money” ECB report Virtual Currency Schemes – A Further Analysis
In October 2015, the European Court of Justice decided to exempt bitcoin transactions from Value Added Tax (VAT). In China, digital currencies are considered to be a virtual commodity rather than a currency, with its sale subject to tax. In Japan, they are recognised as asset-like value and sales are therefore taxed. In Israel, they are not defined as currency legally, resulting in sellers paying a capital gains tax. In both Australia and Canada, digital currencies are generally defined as a property or intangible assets and subsequent transactions are therefore considered a barter.
The National Bank of Ukraine notes that it does not officially support any of these definitions.
It does, however, wish to develop its own position on the legal status of digital currencies and its regulation within Ukraine. It has consequently initiated a dialogue with the Ministry of Finance, the State Fiscal Service, the State Financial Monitoring Service, the National Securities and Stock Market Commission, and the National Commission for the regulation of financial markets services. Together, the issue will be considered at the aforementioned meeting held later this month.
Read the full press release (Language: Ukrainian) from the National Bank of Ukraine.
