Ukraine to Legalize Cryptocurrencies, Bars Payment Use

Ukraine’s central bank plans to legalize cryptocurrencies but not as a payment method. Governor Andriy Pyshnyy emphasized safeguarding monetary policy, collaborating on e-hryvnia development, and aligning with international financial standards, focusing on trading and holding instead.

This decision highlights Ukraine’s regulatory approach, aligning with European standards and impacts the local financial market and global crypto sentiment.

Ukraine’s central bank, under the leadership of Andriy Pyshnyy, has reaffirmed its intention to legalize cryptocurrencies. However, a critical restriction placed is that these digital assets cannot be used as a means of payment. The central bank considers such use a red line, as stated by Governor Pyshnyy. Their focus is developing the e-hryvnia, a central bank digital currency, advancing through partnerships with several European banks.

“It is important for us that our ‘red lines’ are clearly observed. Virtual assets cannot be a means of payment, cannot in any way undermine the effectiveness of our monetary instruments.” — Andriy Pyshnyy, Governor, National Bank of Ukraine

Governor Pyshnyy’s statements emphasized that while cryptocurrency holds will be legalized, the ban on payment use ensures regulatory alignment with international norms. This approach includes implementing FATF standards and addressing concerns on digital asset impact on monetary policy. The planned legal framework could lead to increased institutional participation in cryptocurrency holdings.

The decision significantly impacts both the local and wider crypto markets, notably restricting infrastructure aimed at payments. Without payment facilitation, crypto’s role narrows to asset trading and reserve holdings. While market volatility remains a concern, no significant shifts were recorded in total value locked or liquidity as of August 2025. Efforts are underway to include assets like Bitcoin in state reserves, allowing regulated and possibly enhanced national crypto market workflows.

Financial market participants and developers may view the prohibition of crypto as payment with caution. Still, it assures stability by supporting existing monetary tools. Historical comparisons suggest recognition without tender status often leads to increased regulatory certainty but curtails consumer payment activities. Potential outcomes could include a stronger e-hryvnia deployment and enhanced national financial monitoring mechanisms. This balance is deemed critical to maintaining Ukraine’s financial policy efficacy regarding cryptocurrencies.

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