- Russian president, Vladimir Putin had signed the ‘On Digital Financial Assets’ Bill.
- According to the law, cryptocurrencies will cease to be recognised in Russia.
- Russian government considers blockchain and distributed ledger a positive and technology but views the use of cryptocurrency as a criminal activity.
It is safe to say that Russian’s stance over the cryptocurrency regulation has been nothing confusing. On August 1st, the Russian president, Vladimir Putin had signed the On Digital Financial Assets’ Bill. The bill had allowed transactions of cryptocurrency but had banned the use of digital assets as a means of payments. Prior to which, in March the government had updated its anti-money laundering (AML) and anti-bribery policies for cryptocurrencies.
New Law Will Ban the Use of Cryptocurrency
However, more recently the Russian government has passed a new law on the regulation of the cryptocurrencies in the country. Although, the law suspends the previous ban of cryptocurrencies but still imposes strong restrictions over the use of digital assets in the form of monetary currency. According to the law, cryptocurrencies will cease to be recognised in Russia. However, they can be used in the exchange of products or services. For any transaction that involves digital assets will first require the exchange of Russian rubles. This means that Russians are free to mine and trade digital assets on a cryptocurrency exchange, store digital assets as long as they don’t use them for any products and services that come under the jurisdiction of the Russian government.
Russian Banks and Exchanges Can Open crypto-exchanges in Supervision Of Central Bank
The definition of digital assets as per law: an aggregate of electronic data capable of being accepted as the payment means, not being the monetary unit of the Russian Federation or a foreign state, and as investments. Hence any use of digital assets as a means of payment is a clear violation of the law. Moreover, the law adds the provision of cryptocurrency exchanges which can be opened by Russian banks and exchanges but in strict compliance with the Central Bank. In addition, the issuance of new digital currencies is allowed but again in strict supervision of the Central Bank.
As mentioned above, Russia’s view over the use of blockchain technologies has been sceptical. Russian government considers blockchain and distributed ledger a positive and technology but views the use of cryptocurrency as a criminal activity. Mati Greenspan, founder at Quantum Economics said that the Russian crypto regulation may not be the warmest crypto regulation but is also not the coldest. However, it’s good that Russian citizens are seeing clarity in the cryptocurrency laws passed by the government.