Central Bank Official Blames Regulators for Blocking Cryptocurrency Development

Bhushan Akolkar
By Bhushan Akolkar
Posted on Jan. 9, 2019
Central Bank Official Blames Regulators for Blocking Cryptocurrency Development

A high-ranking official of the National Bank of Ukraine (NBUI) - Mikhail Vidyakin - has recently blamed the country’s regulators for the excessive interference and hindering the development of the cryptocurrency sector. 

Vidyakin, who currently heads the Strategies and Reforms Department at NBU says that issues surrounding legalization of cryptocurrencies are institutional in nature. The involvement of too many regulatory agencies is the reason why cryptocurrencies still don’t have a place in Ukraine’s financial legal framework. 

While speaking to the local crypto news outlet ‘Let Know’, Vidyakin said that regulators are not giving a fair chance for the cryptocurrency market to develop. He believes that traditional banking institutions should be open to FinTech growth.

For this, the government authorities in Ukraine should limit the number of regulatory bodies having control over the crypto businesses. Later, they should form a legal framework defining the ambit of financial innovations and the lack of regulations. 

Ukrainian Officials Proposal Asks for the Growth of FinTech Sector

Before Vidyakin, there have been other officials who have raised this issue of introducing structured regulations while maintaining a balance between innovation and regulatory laws. Last year in January 2018, Ukraine’s minister of justice Pavel Petrenko had put forward a similar recommendation saying “Bitcoin must be brought into the legal field”.

At the National Cybersecurity Coordination Center in Kiev, top officials have also discussed the status for digital assets. Moreover, they have also expressed concerns over “the uncontrolled circulation of cryptocurrencies in Ukraine”. On the other hand, Oleksandr Turchynov, the Secretary of the National Security Council have stressed that “the development of the cryptocurrency market cannot be left unattended”. 

Over the last two years since 2017, a number of proposals to regulate Ukraine’s crypto sector have surfaced, but with a little progress on the ground. Last year in 2018, regulators have decided to completely regulate the crypto sector in two stages. 

The first stage involves finalizing the legal status of digital currencies by the end of 2019. The second stage involves regulating custodial platforms and crypto wallet providers by 2021. 

A study released last month in December 2018 says that Ukrainians trade cryptocurrencies worth $775 million on yearly basis. The authors of this report propose recognizing cryptocurrencies as “currency variables” and their regulation like the fiat currencies. 

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