Ukraine's Central Bank Withholds Support for Crypto Bill That Cleared Committee

The National Bank of Ukraine has declined to back a proposed law on digital assets which was approved by a parliamentary committee for a final vote. The bank cautioned that the text exempts foreign tokens functioning as electronic money from its oversight and endangers monetary sovereignty.

According to a Nov. 4 statement, the central bank stated that Draft Law No. 10225-d on virtual asset circulation, which was recommended by the Verkhovna Rada Committee on Finance, Tax and Customs Policy for adoption in the second reading and as a whole, does not incorporate agreements reached during its creation.

The NBU noted it only obtained the final version late on the evening prior to the committee vote, calling the process “was not sufficiently transparent.” Deputy Governor Oleksii Shaban voiced the bank's concerns during the committee session, but the NBU indicated the setting prevented a thorough discussion.

Ukraine enacted a regulatory framework for virtual assets back in 2022. The latest legislation aims to subject that market to comprehensive rules inspired by the European Union's Markets in Crypto-Assets regulation (MiCA) and advice from the International Monetary Fund. The NBU has stated it backs that approach in principle.

Three risks the NBU flags

The central bank's stated opposition is built on three issues.

The initial concern is that the bill would permit foreign tokens to enter Ukraine even if they operate as electronic money without equivalent regulatory oversight in their home countries. This, according to the NBU, endangers monetary sovereignty, the effectiveness of monetary policy, payment systems, and financial stability.

The central bank demands the same authority over foreign tokens that it wields over locally issued ones — the ability to evaluate those assets and, if necessary, limit their movement within Ukraine.

The second risk is that streamlined entry for foreign virtual assets should not allow them to circumvent regulations that cover similar Ukrainian assets. Without this equivalence, the NBU cautioned, parts of the market could grow beyond proper supervision and generate regulatory arbitrage.

The third risk involves potential monopolization and corruption in the process by which the National Securities and Stock Market Commission would license trading-platform operators. The NBU originally resisted numerical limits but later accepted as a compromise to restrict the initial group to three legal entities selected through a competitive process. According to the bank, the final version removes an explicit five-year cap and leaves the number of operators up to the securities commission without sufficient antitrust protections.

What the bill would do next

The committee's Nov. 4 endorsement does not make the law. A final vote in the Verkhovna Rada is anticipated later this month. If passed, the regulations would become effective on July 1, 2027, as reported by Interfax Ukraine, with oversight divided between the NBU and the securities commission.

In the committee's version, individual profits from virtual-asset transactions would be subject to Ukraine's normal personal income tax, with a concessional 5% rate until the close of 2028 on assets purchased before the law becomes active. Exchanges between cryptocurrencies would be tax-free, and virtual-asset deals would fall outside value-added tax.

The dispute arises as Ukraine still discusses the extent to which bitcoin and other digital assets should be integrated into state finances. Last year, legislators submitted a distinct bill that would permit the NBU to include virtual assets, including bitcoin, in its foreign-exchange and gold reserves — an authorization the bank would not be obligated to utilize.

“The development of the virtual asset market and the protection of monetary and financial stability are not mutually exclusive,”

the NBU said. It urged parliament members to improve the document together with all involved and said it remains willing to cooperate.

The question now is whether Ukrainian lawmakers will revisit the foreign-token and licensing sections prior to a full vote, or advance the committee version and exclude the central bank from a structure it assisted in creating.