Although cryptocurrencies are not legal tender, payments using them could soon be permitted in Ukraine
The Ukrainian government is drafting legislation that would allow payments using cryptocurrencies within the country. This proposed law would not make cryptocurrencies legal tender in Ukraine, but it would enable their use for purchasing goods and services under regulated conditions.
Oleksandr Bornyakov, Deputy Minister at Ukraine’s Ministry of Digital Transformation, introduced a bill intended to legalize payments made with cryptocurrencies. The plan envisions payment intermediaries facilitating conversions from crypto to fiat currency, allowing merchants and consumers to settle transactions while complying with existing financial rules.
Bornyakov clarified that the draft law on virtual assets does not declare cryptocurrencies as legal tender. Instead, it permits their use for paying for services and products when handled through licensed payment processors that convert digital assets into fiat currency to complete payments.
The bill draws a parallel between the role of the US dollar in Ukraine and cryptocurrencies: although the US dollar is not legal tender in Ukraine, it is commonly used to pay for goods and services via dollar-denominated cards. In the same way, payments with cryptocurrencies would be lawful when executed through an intermediary.
The proposed legislation would also officially legitimize cryptocurrency trading and reporting in Ukraine. By recognizing trading activity and establishing formal reporting requirements, the bill aims to expand the number of regulated crypto service providers in the country, including exchanges and wallets.
While most countries do not treat cryptocurrencies as legal tender, many nevertheless permit their use to pay for goods and services under regulated frameworks. El Salvador is set to become the first country to adopt Bitcoin as legal tender on September 7, following the earlier passage of legislation this year. Other countries in Latin America, such as Uruguay, have also examined options for granting Bitcoin a special legal status.