NextFin News - Ukraine's central bank has refused to back the country's flagship crypto-legalization bill in its current form, warning that the draft lets foreign tokens functioning as electronic money enter the domestic market without matching oversight and threatens monetary sovereignty. The National Bank of Ukraine laid out its objections in a Nov. 4 statement, days before the Verkhovna Rada is expected to hold a final vote on Draft Law No. 10225-d, a measure intended to bring Ukraine's virtual-asset market under detailed rules modeled on the European Union's MiCA framework. The standoff puts a wartime economy that ranked sixth globally in crypto adoption at the center of a debate that reaches far beyond Kyiv: who controls the border between the hryvnia and the blockchain.
The Bill, the Vote, and the Objection
Draft Law No. 10225-d, "On the Circulation of Virtual Assets," was cleared by the Rada's Committee on Finance, Tax and Customs Policy for adoption in the second reading and as a whole, with a plenary vote planned for November 2026. The bank said the final text "fails to address key concerns" raised during talks with lawmakers, regulators and crypto industry representatives, and it stopped short of endorsing the measure ahead of the decisive vote.
The legislative path has been long. Parliament passed the bill in its first reading on Sept. 3, 2025. Since then, lawmakers filed 2,538 amendments, according to MP Yaroslav Zheleznyak, one of the draft's sponsors. The NBU said it received the final text only late in the evening before the committee vote and that the process "was not sufficiently transparent." Deputy Governor Oleksii Shaban raised the bank's objections at the committee meeting, but the central bank said the format did not allow for a full debate.
The National Bank of Ukraine said it received the final text only late in the evening before the committee vote and that the process "was not sufficiently transparent."
Despite the opposition, the NBU emphasized that it still supports regulating the market along the lines of the EU's Markets in Crypto-Assets regulation and International Monetary Fund recommendations, and said it remains ready to keep working on the bill. The dispute is therefore not about whether crypto should be regulated, but about which powers the central bank retains once the rules take effect.
That question is not academic. Under the virtual-asset framework Ukraine adopted in 2022, the NBU already held a defined role in the crypto market, sharing oversight responsibilities with the securities regulator. Draft Law No. 10225-d was supposed to replace that transitional architecture with a permanent regime. The bank's objection signals that, in its reading, the new draft gives away more authority than the old one — a rare reversal for a central bank that had publicly backed crypto legalization in principle.
Three Risks the Central Bank Will Not Accept
The NBU's public case rests on three specific objections, each aimed at a different part of the draft's architecture.
First, foreign electronic-money tokens. The draft would allow foreign tokens into Ukraine even when they function as electronic money but face no matching supervision in the countries where they are issued. The NBU warned this threatens monetary sovereignty, the transmission of monetary policy, payment infrastructure and financial stability. The bank wants the same power over foreign tokens that it has over domestically issued ones: the authority to assess those assets and, when needed, restrict their circulation in Ukraine.
Second, regulatory arbitrage. Simplified admission of foreign virtual assets must not let them sidestep rules that apply to comparable Ukrainian assets. Without that parity, the NBU said, segments of the market could expand outside adequate oversight.
Third, market access and concentration. During drafting, the bank said it agreed to a compromise that would initially limit the market to three crypto trading platform operators selected through a competitive process. The final draft instead leaves the number of operators allowed during the first five years to the discretion of Ukraine's securities regulator. The NBU says that risks monopolization and corruption.
Under the bill, the National Securities and Stock Market Commission, or NSSMC, would serve as the main regulator of Ukraine's crypto market, with the Cabinet of Ministers determining the regulator in consultation with the NBU. Service providers must undergo authorization and register with the State Tax Service. The central bank retains a role in overseeing the mechanisms that convert digital assets into traditional currency — the fiat on- and off-ramps where the crypto economy meets the banking system.
Why Monetary Sovereignty Is the Real Fault Line
The NBU's objection is not a generic anti-crypto stance. It is a targeted defense of the central bank's core mandate: control over the money supply and the payment system. The mechanism is straightforward and well documented in emerging-market experience. When foreign-issued tokens that function as electronic money can circulate domestically without the issuer's home supervisor applying equivalent rules, residents can shift savings and payments into those tokens. That substitution weakens demand for the national currency, blunts the transmission of policy-rate decisions, and hands the central bank less visibility into the payment flows it is charged with stabilizing.
For Ukraine, the stakes are higher than in a normal cycle. The economy has been under invasion since 2022, the currency has faced repeated pressure, and the central bank has relied on capital controls and strict oversight of cross-border flows to preserve reserves. In that environment, a regulatory framework that opens the door to unsupervised foreign e-money is not an abstract policy preference — it is a direct challenge to the toolkit the NBU has used to keep the hryvnia functioning through a war.
This is a structural constraint, not a cyclical objection. A cyclical central-bank concern would fade as market volatility subsides; Ukraine's will not, because it is anchored in three durable facts: a war economy dependent on controlled capital flows, a currency under repeated pressure, and an EU-accession path that demands regulatory alignment with Brussels. The bill's fate may move in cycles — committee, amendment, vote, delay — but the underlying conflict between open crypto markets and monetary control is a regime question that will not resolve on its own.
This is also why the objection lands on stablecoin-like instruments rather than on crypto as a whole. A bitcoin held as a speculative asset does not compete with the hryvnia as a unit of account or medium of exchange in the same way a foreign-issued token pegged to the dollar does. The NBU's demand for assessment and restriction powers is, in effect, a demand that anything resembling domestic money — even when issued abroad and wrapped in code — pass through the same gate as domestically issued instruments.
The International Monetary Fund has made the same distinction in its guidance to emerging economies, warning repeatedly that cryptoization — the substitution of foreign digital assets for domestic currency — can erode monetary sovereignty and complicate macroeconomic management. The NBU's citation of IMF recommendations is therefore not a formality; it is an appeal to a multilateral standard that has already sided with central banks on the core question.
A Turf Fight With Market Consequences
Beneath the sovereignty language lies a second conflict: who runs the market. The draft makes the NSSMC the lead regulator, while the NBU expects authority over electronic money and over the fiat on- and off-ramps where digital assets are converted into hryvnia or dollars. That split is workable only if the boundaries are written into law with unusual precision. The NBU's complaint that it received the final text hours before the committee vote suggests those boundaries are anything but clear.
The market-access dispute sharpens the point. The bank's three-operator compromise would have created a small, competitive cohort of licensed platforms. Leaving the number of operators to the securities regulator's discretion for the first five years invites a different outcome: a licensing process vulnerable to concentration and capture, exactly the corruption risk the NBU flagged. For the industry, both outcomes carry costs. A hard cap of three operators constrains competition; an open-ended discretionary regime constrains certainty. Either way, the bill as drafted trades one form of market distortion for another.
The tax provisions add a third layer of tension. The initial draft taxed crypto gains at the standard 18% personal income tax plus a 5% military levy. The updated bill introduces a lower 5% transitional tax rate for existing crypto assets until the end of 2028, while explicitly exempting crypto-to-crypto trades from taxation. That structure is designed to draw wartime activity into the formal tax base, but it also creates a clock: after 2028, the transitional rate expires unless lawmakers act again. For operators planning multi-year investments in licensing and compliance, a tax regime with a built-in sunset is a planning hazard as much as an incentive.
Ukraine's Crypto Weight Is Not Symbolic
The outcome matters beyond Ukraine's borders because Ukraine is not a marginal crypto market. Analytics firm Chainalysis ranked the country sixth globally in its 2024 Global Cryptocurrency Adoption Index, a position built on wartime use of digital assets for donations, remittances and everyday payments when traditional rails were disrupted. In the 2025 index, Ukraine slipped to eighth place, behind India, the United States, Pakistan, Vietnam and Brazil, but it remains one of the world's most active retail crypto economies.
That adoption base is the reason both sides of the debate can claim legitimacy. The industry argues that over-restricting foreign tokens and constraining operator entry would push activity offshore and deny a war economy the resilience crypto has provided. The central bank counters that the same adoption base makes Ukraine more, not less, vulnerable to unmanaged stablecoin inflows and outflows. Both arguments rest on the same fact: crypto in Ukraine is already embedded in the real economy, not parked at its edges.
Ukraine is also not alone in facing this trade-off. Across emerging markets with histories of currency stress — from Turkey and Argentina to Nigeria — regulators have watched stablecoins migrate from the periphery of crypto trading into everyday use as a hedge against local-currency depreciation. The pattern is consistent: adoption accelerates fastest where trust in the domestic currency is weakest, and central banks respond by tightening control over the on-ramps. Ukraine's bill is the latest test of whether a country can legalize crypto markets without surrendering the monetary lever that a stressed economy depends on most.
There is also a geopolitical dimension. Ukraine's path to European Union membership runs through regulatory alignment, and MiCA harmonization is not merely an economic choice. If Kyiv's final framework diverges from the EU model on the treatment of foreign e-money tokens, it complicates that integration and sets a precedent other emerging markets will watch closely. The International Monetary Fund's recommendations sit alongside MiCA in the NBU's statement, underscoring that the bank sees itself as accountable to both European and multilateral standards.
The Counter-Case, and What Would Prove It Wrong
The strongest argument against the NBU's position is the one the crypto industry has made in every jurisdiction that has debated stablecoin rules: over-cautious central banks can smother innovation, and capital moves to the friendliest regulator. On this view, demanding assessment powers over foreign tokens and preserving discretionary licensing would freeze the market at the moment it most needs clarity, drive operators to jurisdictions with clearer rules, and leave Ukrainian users relying on unregulated platforms anyway.
That counter-thesis has force, but it answers a question the NBU did not ask. The bank did not oppose MiCA-based regulation; it opposed a specific gap in the draft — unsupervised foreign e-money — and a specific process failure — last-minute text and unresolved regulator boundaries. The falsifying signal is observable: if the Rada adopts the bill unchanged and, within two years, stablecoin volumes in hryvnia pairs surge while the NBU loses visibility into domestic payment flows and the currency shows renewed substitution pressure, the bank's caution will have been vindicated. If instead adoption grows without monetary instability and licensed operators bring volume into the formal system, the NBU's objections will look like excessive control dressed as prudence.
What Comes Next
In the short term, the most likely path is delay. A central-bank objection of this specificity, raised days before a final vote on a bill with more than 2,500 amendments pending, rarely gets overridden without a negotiated fix. The draft is likely to return to committee, with the NBU seeking explicit e-money oversight, clearer fiat on- and off-ramp rules, and a defined operator-licensing mechanism.
The base case is that lawmakers and the central bank reach a compromise that preserves MiCA alignment while giving the NBU the monetary-sovereignty safeguards it wants, pushing the final vote into 2027. An upside case for the industry is a faster settlement that keeps the 5% transitional tax rate and clarifies the NSSMC-NBU split without new restrictions on foreign tokens. A downside case is legislative deadlock: the bill stalls, activity migrates to offshore or unregulated venues, and Ukraine's hard-won position in global adoption rankings erodes further.
For investors and operators watching the market, the watchlist is narrow and concrete: whether the final text grants the NBU assessment and restriction powers over foreign e-money tokens; whether the operator-licensing regime is fixed by number or left discretionary; and whether the transitional tax rate survives intact through 2028.
Ukraine's crypto fight was never really about whether digital assets get regulated. It is about who holds the keys at the border between the hryvnia and the blockchain — and in a country at war, that is a question no central bank will concede without a fight.
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