Creating a Shared Vision For Virtual Assets Market with Ministry of Digital Transformation of Ukraine

Final Report (full in Ukranian, brief in English)

This is a case study of the foresight held for the novel Virtual Assets (VA) industry in Ukraine. A virtual asset is a digital representation of value that can be digitally traded or transferred, and can be used for payment or investment purposes (e.g. Bitcoin, other cryptocurrencies, tokenized real estate, NFT art, various game currencies, loyalty points etc). The term got most usage in the connection to the regulation efforts made by countries in answer to the rapidly growing crypto market:

As this tools has many legal use cases (e.g. cheap cross border payments or automated loans) because of the pseudonymity and easiness of use it's also very popular on the dark market. Today many progressive jurisdictions (like US or Switzerland) see value and adopt specific regulations to increase the legal usage of VA. Though some (like China or India) use a restrictive approach, which doesn't look sustainable in the long run. Many of these new virtual assets are built on a blockchain technology, which allows more transparency and security not just for VA but also for voting and registries. Though blockchain's innovative approach is understood mostly by techies and market insiders. For others it's something connected to money laundering, drug trafficking etc coined so by mass media. It's not a surprise, as these requires the shifts in the paradigm of what is valuable and how we exchange those values.

Ukraine has a leadership potential in this market due to our unique environment (many great engineers, lack of a working securities market). At the same time we're integrated in the global finance system and need to harmonize our legislation with global regulators (like FATF) if we want to keep our ratings high. This creates quite a tension between the libertarian crypto market and the government. First approaches to the legislation started back in 2016, but were on hold until recently.

Newly created Ministry of Digitalization of Ukraine managed to get the political support to develop the profile law (expected to pass till the end of 2021). Our plan is to build a top jurisdiction for VA companies in Ukraine to develop the digital economy and citizens welfare. Though law is just a first step, ecosystem needs a developmental vision and a strategy to evolve. Which is a challenge due to a novelty of the market, lack of globally accepted standards and differing points of view from various players.

That led us to a need in a productive dialogue with experts: collective research, goal setting and roadmap planning. For that we launched a 4 month foresight program that gathered representatives of every stakeholder group (various governmental agencies, businesses universities, 100+ participants in total). Our biggest hope was to make a shared vision and actively supporting VA community to execute it. Here're some questions we've put in front of ourselves:

Firstly VA is a very new thing and experiences high levels of volatility, uncertainty, complexity, and ambiguity. It's regulation is a challenge for the whole world: market is so vibrant that in 2 years we might have completely different situation.

Then it was first of a kind foresight led by a state agency for the whole industry. Almost no participants knew about foresights before. It got support from the government, business and ecosystem, effectively using private-public cooperation and volunteers work.

Due to the covid restrictions we relied on the digital tools a lot (knowledge base in notion, expert base in airtable, groups calls in zoom). It was combined with 2 full day offline session and various community building practices and informal meetings.

Also the foresight community initiated 11+ projects which would be consolidated and .supported on the platform of the "VA2030 Project Office". It's a NGO initiated by the Ministry of Digitalization of Ukraine to support the goals and provided mediation when needed between the market and the government.

Here're some quotes from the participants:

"By the way, I wanted to say that the process made a pretty big impression on me. Especially I feel that we can really build up something in this country. And that now we have more influence over adopting reasonable decisions. I live with this burning desire since my youth and it motivates me a lot. Therefore, I will be grateful if my brains, experience and strengths will be used for a good cause."

"It was a really interesting experiment, also very important and useful for this new industry that is only at the beginning of its development. First of all, it was a real opportunity for all stakeholders to hear each other. Secondly, it gathered the maximum concentration of the industry expertise per square meter in the offline space. Finally, everyone had the opportunity to make important contacts. Personally, I consider the communication component extremely important."

"My head goes around from the amount of information. It's gonna be even more intense after recognizing all creative and constructive ideas, created in 8 hours of work in the expert circle."

Government agencies were interested in the clear vision, joint actions and improving efficiency. We managed to engage:

Businesses were looking for comprehensible legislation, ability to open up bank accounts and legally work with crypto, improved innovation and reputation capacity. We invited representatives from various VA-related business fields:

VA ecosystem was also represented via

Main point for those actors were in improving the security/safety, transparency, inclusiveness, shared terminology and international collaboration.

Input

Output

Impact

While we could see more tangible results in some time we might just increased our capacity tenfold with motivated, cross-functional and self-organized groups that gathered during the foresight. That helped to learn much more about the strength, weaknesses, opportunities and threats in the industry. We could experience the shared identity and vision with the community, guiding us towards better understanding and governance.

Integration steps

Participants feedback:

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