Economist Andriy Novak warns of potential risks for Ukraine's banking sector due to the possibility of legalizing cryptocurrencies, which could happen as early as next year. While legalization has its advantages, including transparency and investment inflows, the expert points to serious threats for traditional banks.
“When cryptocurrencies are legalized, there will be a fairly significant outflow of capital from the banking sector to cryptocurrency in the financial system,” Novak noted.
According to him, the outflow of money can occur for several reasons. One of them is the opportunity to receive significantly higher income, in case of successful gambling on cryptocurrency price fluctuations, than on bank deposits.
"Secondly, for, say, a wealthy part of Ukrainian society, especially those connected with politics, it is important to hide their capital, wealth. And the easiest way to do this is through cryptocurrency. And to explain my wealth by the fact that I once played cryptocurrency very well and skillfully," Novak noted.
Olena Sosyedka, co-founder of Ukraine's first fintech ecosystem Concord Fintech Solutions, noted that the legalization of cryptocurrencies in Ukraine will also have its advantages for the Ukrainian economy. In particular, according to her, such a step will provide greater transparency for investors and users of cryptocurrencies, which will allow them to carry out transactions within the framework of clear legal norms, without exposing themselves to regulatory risks.
In addition, according to Olena Sosyedka, the official recognition of crypto will create favorable conditions for the inflow of international investments, which are extremely important for the development of the Ukrainian economy, and will also provide an impetus for the development of innovative financial technologies. In particular, it will contribute to the development of blockchain platforms, and will also allow the government to better control transactions and taxation in this sector.
According to the fintech expert, the role of cryptocurrencies in stimulating small and medium-sized businesses is additionally important, as many companies will be able to carry out transactions using crypto assets, bypassing the complexities of banking procedures. This will increase the flexibility and speed of financial transactions.
At the same time, Olena Sosyedka added that in order to avoid illegal transactions, such as money laundering or terrorist financing, it is necessary to implement clear mechanisms for controlling cryptocurrency markets.
“The legalization of cryptocurrencies in Ukraine is an extremely important step that opens a new era in the development of the country's financial system,” the fintech expert summarized.
