Ukraine is the third largest user of cryptocurrency.
According to a study by blockchain company Chainalysis, Ukraine will be among the top three global leaders in cryptocurrency usage in 2022. Vietnam tops the list, followed by the Philippines. In this article, we'll explore the new ranking, the Ministry of Digital Transformation's plans, and examples of how the crypto payment service Binance Pay is operating in the Ukrainian market.
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Ukraine is third in the ranking
For the third year in a row, Chainalysis analysts have compiled a ranking of countries reflecting the level of mass cryptocurrency adoption. Last week, the agency's team presented the Global Crypto Adoption Index for 2022.
The Global Cryptocurrency Adoption Index (GCI) consists of five sub-indices. Each sub-indices is based on the participating countries' use of various types of cryptocurrency services.
This year, analysts at Chainalysis used an updated ratings calculation methodology.
Previously, it was based on three key indicators:
- cryptocurrency market size per capita based on purchasing power parity (PPP);
- the volume of cryptocurrency transactions per capita according to the PKS;
- P2P volume (number of transfers per capita and number of Internet users per P2P)
In 2022, two new sub-indices were added to the ranking, taking into account the volume of DeFi (decentralized financial services) transactions.
In addition, the impact of two metrics that include transactions related to the use of CeFi (centralized services) has been changed.
In other words, the analytics team decided to measure CeFi and DeFi transaction volumes in each country separately (both overall and at the retail level) and use them as equal components of the overall index.
According to Chainalysis, this approach allows:
- more accurately assess the volume of transactions in each country and more accurately compare the performance of rating participants;
- provide more transparent information on “which countries have relatively higher transaction volumes in the decentralized finance ecosystem.”
The performance of 146 countries participating in the ranking was assessed. Analysts calculated the geometric mean for each country and presented the resulting result as a number on a scale from 0 to 1. That is, the closer the country is to 1, the higher its ranking.
Ukraine's score is 0.694, which is the third result among almost one hundred and fifty participating countries.
- For the second year in a row, Vietnam topped the rankings with 1,000.
- The Philippines ranks second (0.753). Last year, the country ranked 15th.
- Ukraine (0.694) rounds out the top three, moving up one place.
- India, last year's vice-leader, fell to fourth place (0.663).
- The United States (0.653) rounds out the top five, moving up three positions in a year.
For comparison, here's the Global Crypto Adoption Index for 2021:
Development of the crypto industry in Ukraine
Ukrainian Minister of Digital Transformation Mykhailo Fedorov announced the research by the blockchain company Chainalysis on his Telegram channel. He writes that the ministry is actively working on legalizing the crypto industry in our country.
"Together with the Securities and Stock Market Commission, we continue to work on a bill to amend the Tax Code of Ukraine to determine the taxation of transactions with virtual assets," the head of the Ministry of Digital Transformation stated.
Fedorov claims that his ministry strives to create the most favorable conditions for the development of crypto-business in Ukraine and attract investors.
The goal of the efforts:
- Attract successful global crypto companies and provide them with opportunities to legally operate in the Ukrainian market and conduct business safely using the banking system;
- Provide Ukrainians with the opportunity to declare their income in virtual assets and protect it.
For reference: The daily circulation of virtual assets in Ukraine is approximately UAH 1 billion.
An overview of global issues of crypto business regulation is presented in ourarticle.
Law "On Virtual Assets"
As is known, a specialized law "On virtual assets" has been developed in Ukraine.
It should ensure the legal and regulatory framework for the virtual asset (cryptocurrency) market and its participants. In practice, it should give the green light to the launch of a legal digital currency market and ensure cryptocurrency transactions are brought out of the shadows.
As previously stated, the Ministry of Digital Transformation, together with the Securities and Stock Market Commission, continues to work on a draft law amending the Tax Code of Ukraine.
The entry into force of this document will help regulate taxation issues related to virtual asset transactions. Its adoption is a prerequisite for the full launch of the Ukrainian virtual asset market.
Important: The Ukrainian Law "On Virtual Assets" will only come into force after changes to tax legislation!
It was planned that bill No. 7150 “On Amendments to the Tax Code of Ukraine on Taxation of Transactions with Virtual Assets” would be adopted by the end of this year, but due to the war, the process is being delayed.
At the same time, the mass adoption of cryptocurrency is gradually expanding.
Binance Pay in Ukraine
Real-time crypto payments are available at many international crypto boutiques, including through Binance Pay, which supports over 50 cryptocurrencies.
Binance Pay is a secure international cryptocurrency payment service created by Binance.
Contactless payment technology is available to exchange users who have created a cryptocurrency wallet on Binance and completed the verification process (identity verification).
A list of stores accepting Binance Pay payments is available on the service's website (there's a Ukrainian version available).
In Ukraine, Binance Pay is only available at a few businesses, but their number is constantly growing. Binance Pay allows you to pay for insurance policies, airline tickets, motorcycles and electric vehicles, as well as computer and gaming products.
The Binance Pay payment system launched in Ukrainian retail in May, alongside Visa and Mastercard. Binance wallet holders now have the ability to pay for goods directly on retailers' websites. The Foxtrot chain of stores was the first to launch the service.
On September 15, blockchain giant Binance and supermarket chain Varus launched online grocery and merchandise payments using Binance Pay technology.
By ordering groceries on go.varus.ua and paying with cryptocurrency, users can not only make purchases but also boost their crypto wallet.
Binance also became the exclusive partner of the airline booking service TTN Tickets.ua, as well as Polis.ua, CompX.com.ua, and Mototek.com.ua. These integrations were implemented in partnership with Settlepay.
If you're interested in crypto and investing, read our articles "What is blockchain?", "Cryptocurrency and Emotions: Tips for Beginners", "New cryptocurrency ApeCoin and its advantages" and other thematic materials from the blog.
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