Volodymyr Nosov (WhiteBIT): How Ukraine can become a crypto hub

Volodymyr Nosov, co-founder of WhiteBIT exchange and a prominent voice in Ukraine's crypto community, laid out his vision in a recent Kyiv Post op-ed. His message: Ukraine has the ingredients to rival Switzerland or Estonia as a crypto-friendly jurisdiction, but the window won't stay open forever.

Nosov's optimism isn't baseless. Countries that got crypto regulation right reaped significant rewards. Switzerland's "Crypto Valley" in Zug attracted over $1 billion in venture capital. Lithuania issued more than 400 crypto licenses, transforming Vilnius into a fintech hub. Estonia's e-Residency program combined with clear crypto rules made it a magnet for digital nomads and blockchain startups.

Ukraine's advantage? A large pool of crypto-savvy developers, existing infrastructure, and – crucially – Ukrainian companies that already operate under EU's MiCA regulation. Nosov argues these homegrown players should get priority treatment to bring their operations (and tax revenues) back home.

Nosov gets specific here: he proposes a two-year grace period with a 5% income tax on virtual asset gains for both companies and individuals.

His reasoning is simple. Set taxes too high, and businesses will stay in Malta or Portugal. Set them right, and you create a competitive edge that attracts capital. It's the same playbook Portugal used when it offered crypto tax exemptions until 2023 – the country became a hotspot for crypto conferences and relocating traders.

The risk Nosov highlights: Ukraine doesn't yet have the institutional maturity of EU countries. Copying MiCA wholesale without adapting to local realities could backfire. The country still faces challenges in banking infrastructure, anti-money laundering systems, and corruption – issues that can't be solved with a single piece of legislation.

One non-negotiable point in Nosov's vision: a complete ban on any companies with ties to Russia. No exceptions, regardless of how attractive their investments might seem.That creates tension. On one hand, Ukraine wants to be open to global capital. On the other, security concerns are legitimate. Russia has a documented history of using financial channels for hybrid warfare. The challenge is enforcing such bans without creating loopholes or false positives that hurt legitimate businesses.

The toughest question: which government body should oversee the crypto market? Nosov notes it must be "flexible" and "tech-savvy" – which rules out most existing Ukrainian bureaucracies.

The regulator question matters more than tax rates. A hostile or incompetent regulator can strangle a market even with perfect laws. Ask anyone who dealt with the SEC's "regulation by enforcement" approach in the U.S.

One overlooked idea in Nosov's piece: allowing stablecoins as charter capital for Ukrainian companies. This would let businesses raise capital in USDT or USDC instead of solely in hryvnia – useful in a country with currency volatility concerns.

It's a radical concept that even most crypto-friendly jurisdictions haven't fully implemented. But it could give Ukrainian startups a genuine edge in attracting international investors who prefer dollar-denominated assets.

Nosov mentions that his industry group submitted proposals through Diia.City.United – Ukraine's special legal regime for tech companies. This matters because Diia.City already offers preferential tax treatment (5% income tax for residents).

If crypto regulations get bundled with Diia.City's framework, it could fast-track adoption. But it also risks creating a two-tier system: one set of rules for tech companies, another for everyone else.

The bill still needs a second reading and multiple amendments. Key questions remain unresolved:

Nosov's framing – "Ukraine as Europe's crypto capital" – is aspirational, not descriptive. The country is starting from behind. Its banking system is less developed than Estonia's. Its institutional trust is lower than Switzerland's. Its legal clarity lags behind Portugal's.

But Ukraine has one advantage those countries lacked: urgency. Post-war reconstruction will require massive capital inflows. A well-designed crypto market could channel billions in investment that might otherwise go elsewhere.

Nosov's op-ed is part policy proposal, part lobbying effort. He represents an industry that stands to benefit from favorable regulations. That doesn't make his arguments wrong – just context that readers should keep in mind.

Passing a crypto law isn’t the real test. It's whether the final version creates genuine competitive advantages or just imports problems from other jurisdictions.

If lawmakers get it right – reasonable taxes, strong security provisions, adapted MiCA principles – Ukraine could indeed punch above its weight in crypto. Get it wrong, and the country risks creating a regulatory mess that drives businesses away.

The second reading of Bill 10225-d will show which path Ukraine chooses.