Key Takeaways
- The Ukrainian central bank criticized a crypto bill after discovering key compromises had been removed.
- The NBU warned that 5 years of licensing discretion could fuel monopolies and regulatory arbitrage.
- The bank urged lawmakers to revise bill to strengthen oversight and ensure fair competition.
NBU Raises Concerns Over Legislative Transparency
The National Bank of Ukraine (NBU) has said it cannot support the current version of draft legislation regulating virtual assets, citing significant risks to the country’s monetary sovereignty, financial stability and market competition.
While the central bank reiterated its support for regulating Ukraine’s cryptocurrency market in alignment with the European Union’s Markets in Crypto-Assets (MiCA) framework, it highlighted several concerns with the final text prepared for a second reading by a committee of the Verkhovna Rada, Ukraine’s parliament.
According to a statement, the NBU criticized the legislative drafting process for lacking transparency. The central bank said it received the final text late Nov. 4 and only then discovered that several compromises reached during working group discussions involving lawmakers, the National Securities and Stock Market Commission (NSSMC) and other stakeholders had been removed.
NBU Deputy Governor Oleksiy Shaban raised these concerns during a committee meeting the following day, but the central bank said the meeting’s format did not allow for a comprehensive discussion. This reportedly prompted the regulator to issue a public warning outlining its concerns.
Foreign Tokens Pose Risks to Financial Stability
Among them, the NBU warned that the current draft would allow foreign tokens to enter the Ukrainian market without adequate regulatory oversight, potentially threatening monetary policy transmission and financial infrastructure stability.
To address these risks, the NBU wants explicit authority to assess risks and restrict the circulation of foreign tokens in Ukraine, mirroring its existing mandate over domestic tokens.
Regarding simplified access to foreign virtual assets, the NBU argued that the proposed law creates loopholes allowing issuers to bypass requirements imposed on domestic counterparts, potentially creating unsupervised market segments. The central bank wants rules governing foreign virtual assets to eliminate regulatory arbitrage and ensure consistent compliance standards to protect national financial security.
Central Bank Warns of Market Monopolization
The NBU initially favored allowing an unlimited number of compliant trading platforms but agreed to a temporary compromise restricting the initial phase to three operators selected through a competitive tender. However, the final draft leaves the number of permitted operators to the NSSMC’s discretion for the next five years without mandatory safeguards against anti-competitive practices.
To address these concerns, the NBU wants clear, transparent authorization rules written into law to reduce corruption risks and prevent market monopolization.
“Sustainable market development is only possible with clear rules, proper regulation, and effective risk control,” the NBU stated in its official conclusion. “The failure to incorporate the NBU’s key objections makes it impossible to support Draft Law No. 10225-d in its current form.”
The central bank called on Ukrainian lawmakers to return the draft legislation for further refinement in consultation with all relevant stakeholders. It also reaffirmed its willingness to continue working toward a regulatory framework that supports an innovative cryptocurrency market without undermining public confidence in the hryvnia or compromising national economic security.
