Kiev as Bitcoin Capital of Eastern Europe

Apr 22, 2016 | by VienS
Kiev as Bitcoin Capital of Eastern Europe

While Russian Ministry of Finance together with Investigation Committee are planning to make any operations with bitcoin a serious crime and to sentence persons found guilty to seven years in prison, in Ukrainian capital city, Kiev, they held Bitcoin Conference Kiev at the end of March. The conference participants noted, among other things, that Ukrainian government attitude is more and more shifting to the idea of full legalization of bitcoin in Ukraine.

The Conference was arranged by bitcoin enthusiast Anton Kobrinets and Distributed Lab Company and was supported by Microsoft and PrivatBank. The purpose of the conference was to review governance-initiatives planned to be introduced, or already being implemented in Ukraine. In particular they discussed the state property privatization system based on blockchain.

All conference participants were divided into 2 streams, one for general public and one for expert. The former was oriented to rookies. Here they explained what a blockchain and bitcoin are and how they work and how cryptocurrencies make an impact on the global financial situation. The expert stream was discussing specific projects and problems the industry is facing now. For instance David Kiziria, Advisor of the Presidential Administration of Ukraine, made a presentation «Digital Middle Ages» for experts. Roman Suljik, the head of Supervisory Board by Ukrainian National Depository, shared with expert the position of bankers and big corporate business with regard to bitcoin.

In conclusion, the final version of eAction 3.0 was presented by Lasha Antadze from Innovations and Development Fund. The blockchain-based program was developed for de-centralization of state assets privatization action.

Cryptocurrency and Russian Bureaucracy

In Russia, on the contrary, there is no certainty. Only a year ago bitcoin was the top subject of discussions about cryptocurrencies. Now they prefer to discuss blockchain because according the community's general opinion, the blockchain idea is safer and easier to sell in Russia rather than bitcoin. However, it should be noted that both blockchain and bitcoin situation seems to have lost momentum and come to a standstill. Currently only Qiwi is dealing with digital currencies and block chain. And still the National Settlement Depository is closely monitoring all such transactions.

Actually all the interested parties in the cryptocurrency market are waiting for some signal from the state or for some large operator, associated with the state, to emerge. So far nothing is happening but discussions, plans and monitoring of the world trends related to bitcoin.

And there is nothing surprising about that. Russia have much better financial resources than Ukraine and these financial resources are under much more stringent control. And Russian bureaucratic machine is much more sophisticated and overwhelming as compared with Ukrainian bureaucracy.

As we know, any cryptocurrency implies absolute absence of control from the state. As a matter of fact, cryptocurrency robs any state of its function of control over cash flows, monetary policy and money printing process.

That is why Russian bureaucracy's attitude to any cryptocurrency is very stringent and severe.

Cryptocurrency and Ukranian Bureaucracy

In 2014 Valentin Nalivaichenko - at that time he was a head of Ukrainian Security Service - stated that cryptocurrecnies should be banned because terrorism is financed with their help. But his statement was booed by the general public. The response from the community was like: Are you serious? Is cryptocurrency your biggest problem right now?

This position of both general public and experts was only logical. For one thing, during the financial crisis the state should not spend any money on solution for the potential problem, which may never arise in future. And for the second thing, bitcoin community was actively cooperating with National Bank of Ukraine even at that time.

And, thanks to such cooperation, the position of National Bank of Ukraine is consistent with current views of European Central Bank: “We would like to warn you, that use of cryptocurrencies is associated with certain risks, so we are closely monitoring the development of situation”. In fact the National Bank of Ukraine is busy with absolutely different problems not related with cryptocurrencies business in Ukraine in any way.

Though, only a year ago the National Bank of Ukraine (NBU) was much more suspicious. This shift in attitude of National Bank of Ukraine to bitcoin was caused by the fact that now the bank management has much better understanding of the technical side of the cryprocurrency functioning and use.

The Practical Use of Bitcoin in Ukraine

Speaking about the practical side of bitcoins use, a real estate agency and a show room in Odessa are already accepting cryptocurrency as a method of payment. Kiev supermarket Natural Foods is accepting bitcoins too. Finally, PrivatBank launched a new service which allows to pay for your various purchases with bitcoins This service is automatically converting bitcoins into hryvnias, the local currency, according to floating exchange rate, so bitcoin owners can use them as usual Ukrainian hryvnias.