What happened

As of 9:50 a.m. EDT today, here's how prices look for several of the biggest names in cryptocurrency:  

  • Bitcoin (BTC -1.16%), granddaddy of the digital currency movement, is up 1% over the last 24 hours, according to data from Coindesk.
  • XRP (XRP 0.22%), the token closely associated with Ripple, is up a bit more at 1.9%.
  • Dogecoin (DOGE -4.27%) is gaining 2.3%.
  • And Ethereum (ETH 0.78%) is leading the pack higher -- up 3.2%.
Gold Bitcoin symbol on a stock chart.

Image source: Getty Images.

So what

And so it appears that cryptocurrency prices, which crashed in a big way earlier this week after El Salvador botched its Bitcoin-as-a-national-currency rollout, are bouncing back a bit Thursday on better news from a different country -- Ukraine.

As Ukraine's Kyiv Post reports this morning, the country's parliament has just passed a bill that, if signed by President Volodymyr Zelensky, will legalize the production, ownership, and use of digital currencies in Ukraine for investment and regulate the local cryptocurrency market to protect crypto users against fraud. The law is expected to go into effect in 2022, but will first require implementing legislation to amend Ukraine's civil code and tax code, as well as a new law establishing a state registry of cryptocurrency mining operations.

Also noteworthy is that the law specifically does not authorize the use of cryptocurrencies as legal tender. Only the Ukrainian hryvnia can be used for that.  

Now what

That caveat aside, Ukrainian Minister of Digital Transformation Mykhailo Fedorov notes that "only a few countries in the world have legalized crypto assets -- Germany, Luxembourg, Singapore [and now] Ukraine will be one of them." Fedorov argues that by establishing "favorable conditions" in the country, Ukraine is encouraging entrepreneurs to register there instead of elsewhere. "The entrepreneurs will pay taxes to the budget, but will be protected by the state,” he said.

That's the line I think investors should be focusing on right now. According to CNBC, Ukraine is now "the fifth country in as many weeks to lay down some ground rules for the cryptocurrency market," adding that in addition to El Salvador institutionalizing Bitcoin as a national currency this week, Cuba passed a law "to recognize and regulate cryptocurrencies" two weeks ago, Panama is working on a cryptocurrency law, and the U.S., too, has taken a step in this direction by mentioning cryptocurrency in the new $1 trillion infrastructure bill.  

I think it's no coincidence that in the U.S., as in Ukraine, one of the government's primary interests in cryptocurrency seems to be figuring out how to tax the stuff. The more countries that decide cryptocurrency is at least as much a cash cow as a threat to their own currencies, the more popular crypto is going to become internationally.