Ukraine is taking a decisive step forward in regulating cryptocurrencies with its new bill aiming to legalize and tax digital assets. With 246 lawmakers voting in favor during a first-reading vote, Ukraine’s Verkhovna Rada has approved this landmark legislation. This move signifies the country’s commitment to embracing virtual assets and blockchain technology as part of its evolving Web3 economy. This new law aims to formally recognize cryptocurrencies as legal entities while also introducing tax frameworks for digital asset transactions. Key details include a 18% income tax on profits, a 5% military tax on profits, and a temporary 5% tax on fiat currency conversions during the first year. The aim is to promote transparency and structure within Ukraine’s rapidly growing digital economy. The bill also raises questions about regulatory oversight, with the National Bank of Ukraine (NBU) and the National Securities and Stock Market Commission (NSSMC) potentially taking on this role. While the specifics are still being determined, Yaroslav Zhelezniak expressed that there is much to adjust before the second reading. “I don’t see much point in going into detail now, there will be many changes before the second reading. It is still unknown who the regulator will be (NBU or the National Securities and Stock Market Commission).” 2025 reports by Chainalysis rank Ukraine as the eighth top cryptocurrency adopter. The country’s adoption of blockchain technology has been notable, particularly in decentralized finance (DeFi), while simultaneously building reserves to fuel financial innovation and growth. Despite this progress, Ukraine lost at least $10 billion due to digital asset hacks and threats in 2023. A recent report from the Royal United Services Institute (RUSI) highlights these risks. The lack of clear crypto regulations has left the country vulnerable, as reported by RUSI which highlighted that “Ukraine-specific risks are primarily connected with over-the-counter (OTC) activities in the country, its role as a threat hub for criminal activity, and cryptocurrency’s use to fund procurement of sanctioned Russian military components, money laundering schemes, and more.