The Economic Development and Trade Ministry of Ukraine has initiated a “state policy” for the classification and legalization of crypto-related activities, Ukrainian state information and news agency Ukrinform reported Oct. 26.

The Ministry has reportedly issued an official press release stating that its purpose is to “create understandable conditions for conducting activities in the field of virtual assets and virtual currencies," and to usher in “adoption of the concept of a state policy” for crypto.

To this end, it has proposed establishing legal definitions for key terms, including “virtual currency” (“cryptocurrency,”) “virtual assets,” Initial Coin (or Token) Offerings (ICOs or ITOs), cryptocurrency mining, “smart contracts,” and “tokens.”

Ukrinform reports the concept is expected to be implemented in two stages, and will be completed in 2021.

Although Ukraine has not until now regulated crypto, the first signs the country was on track to its legalization surfaced in mid-May, when a member of the parliament, Alexei Mushak, attached a copy of an apparent draft legislation document for crypto to his public Facebook page.

The document outlined that the legislation aims to create a “free and transparent” digital asset market, outlining rules for storing, using, and exchanging crypto, digital tokens, and smart contracts at a state, entity, and individual level.

In mid-September, the country’s parliament proposed a draft bill that, if signed into law, would levy a five percent tax on individuals’ and entities’ crypto holdings. For businesses’ crypto-related profits, it proposed the basic corporate and personal income tax rate of 18 percent.

An alternative bill proposing specific crypto tax exemptions and a slightly different definition of various types of crypto assets was put forward by a Ukrainian legislator in early October.

As of mid-October, a dedicated working group within the Ministry of Finance has reportedly been working to elaborate the framework for crypto taxation.

In parallel, the National Bank of Ukraine (NBU) is considering a state digital currency tied to the local fiat currency, the hryvnia, which would be centralized and remain under government control.