- Russian President, Vladimir Putin on Friday, signed a bill that will allow the transactions of digital financial assets (FDA) but will ban the use of cryptocurrencies as a means of payment.
- Cryptocurrencies will cease to be recognized as a means of payment for goods and services in Russia.
Russian President, Vladimir Putin on Friday, signed a bill that will allow the transactions of digital financial assets (FDA) but will ban the use of cryptocurrencies as a means of payment. This means that cryptocurrencies can be used as a means of pledge, for purchasing as well as selling transactions and can also be exchanged for any other digital assets. However, cryptocurrencies will cease to be recognized as a means of payment for goods and services in Russia.
Cryptocurrencies To Be Given A Legal Status In Russia
Only a few days ago, Russia’s legislative body – State Duma had passed a bill which was named ‘On Digital Financial Assets’ after its third hearing. The bill gave cryptocurrencies and their respective trading a legal status in the country. However, it did prohibit the use of digital assets for payments. The new legislation allowed the Russian citizens to issue stablecoins. Moreover, apart from issuing, people were also allowed to exchange them for digital assets even those which were issues outside Russia. As per the bill, the Bank of Russia was officially in charge of overlooking all the activities involving digital currencies.
The Russian DFA Proposed To Be Devoid Of Criminal Codes
Shortly after this, an updated version of the crypto bill was initiated. State Duma, proposed that the regulation won’t include any criminal enforcement such as fines or prison punishments for illegal use of digital assets. As per the announcement made by Anatoly Aksakov, the committee has decided to drop the idea of introducing any criminal codes to the bill. However, the Russian government may impose liability through another bill. Apart from DFA, the government is likely to pass another bill ‘On Digital Currency’ which will brief about crypto regulation and is expected to roll out by the end of the year.
Skeptical Stance Of Russian Government Over Crypto May Have Helped The Growth Of Crypto Trading
The skeptical stance of the Russian government over cryptocurrencies has a long history. The DFA bill has experienced many delays since 2018 when it was first proposed. Even President Putin stressed the adoption of the bill a couple of times before. As per the State Duma, the DFA is expected to be adopted by January 2021. However, all these uncertainties in the crypto regulation have in no way stopped the enthusiasm of crypto traders in Russia.
Paxful reported a growth of approximately 365% in the number of users since the last year. Revenues are also up by 350%. Experts think that the current pandemic situation and the dicey crypto stance of the government may facilitate the growth of peer to peer trading in Russia.