Ukraine President Volodymyr Zelenskyy legalized cryptocurrencies in the embattled country, signing a law on Wednesday that regulates virtual assets and crypto service providers.

The landmark legislation, which was cleared by the Ukrainian parliament in February, allows "a legal market for virtual assets" in the country, as noted by a statement released by Ukraine's Ministry of Digital Transformation.

In a tweet on Wednesday, the Ministry emphasized that "foreign and Ukrainian cryptocurrencies exchanges will operate legally" while allowing local banks to "open accounts for crypto companies."

This is seen to support the role of cryptocurrencies in the ongoing Ukraine conflict, which led to a global campaign to donate crypto to the beleaguered nation. Ukraine has reportedly received a total of $100 million in crypto donations since the Russian invasion commenced.

Ukraine Crypto Law Offers Regulatory Framework for Digital Assets

While the new law does not make crypto legal tender, it offers a regulatory framework for virtual assets. Ukraine's Ministry of Finance is crafting tax regulations and policies for cryptocurrencies, the statement further said.

The law pinpoints the legal status, classification, ownership, and regulators of virtual assets, in addition to establishing registration requirements for the crypto service providers, the statement added.

Ukraine's Ministry of Digital Transformation also tweeted that the country's National Commission on Securities and the Stock Market will regulate the burgeoning local crypto market, as the exchanges were to operate legally.

The Ministry is responsible for "shaping and pursuing a policy in the field of virtual assets" and determining the order of the circulation of crypto. It is also tasked with issuing permits to crypto asset providers, while "carrying out supervision and financial monitoring in this area," a Ukraine government announcement last month read.

Read Also: Ukraine Raises $10 Million in Crypto Donations: European Country Accepts Bitcoin, Ethereum, and USDT

Global donations amounting to $100 million came from individuals who are supporting Ukraine's defense and humanitarian efforts.

The bill first passed Ukrainian parliament last February 17 after Zelenskyy initially vetoed a previous version approved in September 2021, Coindesk reported. The country's Finance Ministry is executing changes in the national tax and civil codes to launch the market for crypto assets.

Ukraine Law Passage Sparks Crypto Market Rally

This development has led to mostly positive sentiment across the cryptocurrency market, with Bitcoin surging 4.72% eclipsing the $40K mark to $41,038 on Wednesday, Cointelegraph real-time figures reveal. Ethereum is likewise rose 5.85 percent to $2,766. Other major assets were also on the green, including Litecoin, Binance Coin, Solana, and Ripple.

The rally has reflected on the top crypto exchanges, with Robinhood token HOOD registering a 14.3% increase to $12.78, and Coinbase Global's COIN surging 8% to $172.53.

A report from the Global Crypto Adoption Index revealed that Ukraine is ranked first globally in cryptocurrency use among its population. While the initial adoption of virtual assets, such as Bitcoin and Ethereum, were boosted by financial risks and high inflation, this crypto regulatory push in Ukraine will further spark the growth of its local crypto market.

Crypto investors, for one, will be interested in validating their crypto assets while paying low taxes. Virtual asset holders from other countries would also redirect their holdings to Ukraine, to avoid pressure from their governments.

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