Crypto-funded debit card in Ukraine

Law of Ukraine "On Virtual Assets" (Закон України "Про віртуальні активи"): Link to Ukrainian Parliament (Verkhovna Rada) website - official legislative acts (You may need to use a translation tool for the full text).

As of late 2023/early 2024, this secondary legislation has not yet been fully adopted, meaning the actual process for obtaining a license is largely suspended or not fully operational. The focus of the government has been on wartime priorities.

National Bank of Ukraine (NBU): Responsible for the regulation of virtual assets secured by currency (fiat-backed stablecoins) and for payment services involving virtual assets.

Ministry of Digital Transformation of Ukraine (MinDigital): Responsible for the regulation of other types of virtual assets, including licensing of Virtual Asset Service Providers (VASPs).

State Financial Monitoring Service of Ukraine (SFMS): Responsible for financial monitoring of transactions with virtual assets and ensuring compliance with AML/CFT legislation.

Exchange services between virtual assets and fiat currencies. (This covers traditional crypto exchanges).

Payment Processors: If they facilitate transfers of virtual assets or exchanges between virtual assets and fiat, they will require a VASP license covering the relevant service (transfer, exchange).

For exchanges (providers of exchange services between virtual assets and fiat): Potentially around UAH 10 million (approx. $250,000 - $300,000, subject to exchange rate fluctuations).

For other VASP activities (e.g., custody, transfer): Potentially around UAH 5 million (approx. $125,000 - $150,000).

Currently, the exact, officially finalized capital requirements are pending the adoption of secondary legislation.

This is a cornerstone of the VA Law and is largely aligned with international standards (FATF recommendations).

VASPs will be subject to the Law of Ukraine "On Preventing and Countering Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction."

Law of Ukraine No. 361-IX "On Preventing and Counteracting Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction" (dated December 6, 2019, with subsequent amendments).

This is the foundational AML/CFT law in Ukraine, bringing the country's framework closer to FATF recommendations and the EU's 4th and 5th AML Directives. It designates "virtual asset service providers" as "reporting entities" (subjects of primary financial monitoring).

Identification and Verification:

Enhanced Due Diligence (EDD):

Transactions above specific thresholds (e.g., equivalent of UAH 400,000 for certain types of operations, though suspicion requires reporting even below this).

Law of Ukraine "On Virtual Assets" (№ 2724-IX): Adopted by the Verkhovna Rada (Parliament) on 6 September 2022 and signed into law by the President on 15 March 2023. This is the foundational law.

Law of Ukraine "On Payment Services" (№ 1591-IX): Adopted on 30 June 2021. This law defines electronic money and payment services. The Law "On Virtual Assets" explicitly distinguishes virtual assets from electronic money under this law.

National Bank of Ukraine (NBU): Responsible for regulating virtual assets that are secured by currency values (e.g., fiat-pegged stablecoins) and for supervising virtual asset service providers (VASPs) that provide services with such assets. It also oversees payment services and electronic money.

Virtual Assets vs. Electronic Money/Securities: The Law "On Virtual Assets" categorizes virtual assets as intangible goods, explicitly stating that virtual assets are not legal tender, electronic money, or securities.

"Secured Virtual Assets" (Забезпечені віртуальні активи): This is the category most relevant to stablecoins. A "secured virtual asset" is defined as a virtual asset that is secured by a certain object (money, other virtual assets, certain property rights, etc.).

Full Backing: For "secured virtual assets" (which includes stablecoins), the Law "On Virtual Assets" generally mandates full and appropriate backing of the virtual asset by the underlying asset (e.g., fiat currency, other virtual assets, or property rights).

NBU: Licenses VASPs dealing with secured virtual assets whose underlying asset is currency value (i.e., fiat-pegged stablecoins) and those offering services with such assets.

Current Interpretation: Profits derived from virtual asset transactions (e.g., selling cryptocurrency for fiat currency, exchanging one cryptocurrency for another at a profit, receiving crypto as payment for services) are generally treated as other investment income or simply other taxable income.

Personal Income Tax (PIT): 18%

Military Levy: 1.5%

Services related to virtual assets (e.g., exchange fees charged by a virtual asset service provider, custodial services, brokerage services) might be subject to VAT (20%) if they qualify as taxable services performed in Ukraine.

Legal Basis: Criminal Code of Ukraine (Кримінальний кодекс України), Code of Administrative Offenses of Ukraine (Кодекс України про адміністративні правопорушення).