With Bitcoin becoming legal, Ukraine trades more crypto than fiat


Just a day back, the Government of Ukraine passed a law that legalized Bitcoin and other cryptocurrencies. The law not only grants users the right to operate cryptocurrencies but also defines the clear rights and duties of all market participants. 

Post the historic law was passed, an interesting stat started doing rounds on social media. The number of crypto transactions executed per day in Ukraine has fairly been more than its fiat trade transactions.

Does Ukraine intend to become the crypto capital of the world?

Well, the aforesaid dataset comes as no surprise because ministers in Ukraine have been inclined towards crypto for quite some time now.

Consider this for instance – Back in November last year, Alexander Bornyakov, the deputy minister at the Ministry of Digital Transformation went on to state,

“The big idea is to become one of the top jurisdictions in the world for crypto companies. We believe this is the new economy, this is the future, and we believe this is something that is going to boost our economy.”

Ukraine is one of the most popular destinations picked by entrepreneurs, for it subjects them to quite low taxes and minimum paperwork. Alongside, Ukrainians are known for their skill set and that too comes as an added advantage to companies who end up establishing themselves there.

Traditional economists, regulators, and policymakers all over the world continue to remain skeptical about crypto. Time and again, crypto has been attributed to be the currency of money launderers, terrorists, and mobsters. Nonetheless, crypto-friendly like El Salvador and Ukraine have already set out on their respective journeys of changing that narrative.

With entrepreneurs continuing to divert funds into this novel field, these governments have started playing smartly. Funding of all blockchain-related tech, right from cryptocurrencies and gaming to infrastructure and non-fungible tokens has massively ballooned up to over the past few months.

Venture capital funding for blockchain startups reached $25.2 billion last year, up 713% from $3.1 billion in 2020, according to CB Insights’ “2021 State of Blockchain” report. Parallelly, the funding for NFT firms jumped to $4.8 billion in 2021, up from just $37 million in 2020. Meanwhile, global DeFi deals executed reached 240, almost doubling from 124 in 2020. In all, over 1,000 blockchain deals were executed last year, surpassing 2020’s level of 662.

CB Insights sees the said numbers rising further in 2022, given the growth opportunities available in the crypto, NFT, and Web 3 startups dimensions.

So now, if crypto-centric businesses continue to choose Ukraine over other tax-haven countries, the nation would be able to assert even more dominance amongst its geopolitical counterparts. And who knows that going forward, it might end up becoming the crypto capital of the world too, given the fact that it already has the first-mover advantage.