Ukraine Approves First Draft of Bill to Legalize and Tax Bitcoin

Ukraine’s parliament has approved the first draft of a bill that seeks to legalize crypto and introduce a new tax regime on profits from crypto transactions. According to MP Yaroslav Zhelezniak, who shared the update on his Telegram channel, the measure secured 246 votes in favor, signaling strong political support.The proposal is part of Ukraine’s broader effort to modernize financial regulation and align with international standards. Officials believe clear taxation rules could boost state revenues while encouraging legitimate use of digital currencies.Tax Rates and IncentivesThe draft law outlines a dual tax structure. Profits from cryptocurrencies, such as Bitcoin, would be subject to an 18% income tax and a 5% military tax. This brings the total to 23%. This figure is consistent with earlier recommendations from Ukraine’s financial regulator.To encourage early compliance, the bill proposes a preferential 5% tax on converting crypto into fiat currency during the first year of implementation. Lawmakers hope this incentive will smooth the transition and attract more users into the formal system.Regulatory Authority Still UndecidedWhile the bill lays out clear tax obligations, it leaves open the question of oversight. Lawmakers have not yet determined whether the National Bank of Ukraine or the National Securities and Stock Market Commission will supervise the sector.MP Zhelezniak has said that amendments are expected before the bill’s second reading. He also emphasized that the current draft is a starting point only and may undergo significant revisions.Ukraine’s Strong Position in Global AdoptionUkraine is already recognized as one of the world’s most active crypto markets. In the 2025 Global Crypto Adoption Index by Chainalysis, the country ranks eighth overall. It performs especially well in categories such as centralized trading volumes and DeFi participation, highlighting its broad appeal.Digital assets have played a crucial role in Ukraine’s economy, particularly since its war with Russia in 2022. They have facilitated fundraising, cross-border payments, and financial support to communities. Observers note that this unique context has accelerated crypto adoption compared to many other countries.Global Shift Toward Crypto TaxationUkraine’s initiative comes as more governments worldwide are formulating policies for digital assets.In Denmark, the Tax Law Council proposed in October 2024 to tax unrealized crypto gains, though the measure is still under review.Brazil followed a different path in June 2025 by ending its previous exemptions and introducing a 17.5% flat tax on crypto profits. In the United States, representatives in the lower legislative chamber were scheduled to hold a hearing in July 2025 on a framework for taxing crypto assets.