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- The Putin government does not consider cryptocurrency as a legal tender but wants to use it as a means of payment in contracts
- Cryptocurrency exchanges are banned in the country as they violate consumer rights and lead to illicit activities
- Moreover, the Central Bank of Russia is currently working to introduce a prototype of the digital ruble and how it helps the economy
Russia is one of those countries that does not consider cryptocurrency as a legal tender or means of exchange. However, lawmakers in the lower house of State Duma are eager to ring in changes that will help two parties in a contract receive and pay in the form of digital currency. The payments will be safe and secure through which contractual payments can increase multifold within the country. A consensus has been reached for the above matter and will soon be announced by the Putin government.
Cryptocurrency did not fare well in Russia
Vladimir Putin has raised concerns about the money-laundering activities that can be carried out with cryptocurrency along with illicit cross-border transactions.
To end such activities, the government made a law in June 2020 stating that citizens will not be allowed to hold cryptocurrency. The law came into effect in January 2021 and considered digital currency as property.
Subsequently, it is taxed under the slabs present in Russia and is not considered a legal tender. In February, lawmakers initiated the reforms to allow contractual payments to be carried out via cryptocurrency. It helps reduce transaction fees and does not require the external authority to regulate its supply of our demand.
Internal conflict and the whole of the digital ruble
While the government is completely against cryptocurrency, the Central Bank of Russia is on track to issue a prototype of the digital ruble by the end of this year.
It is remarkable to see that the government and the Central Bank of a country are working in tandem but in different directions. The digital ruble is about breaking stereotypes in the country and the way the financial system works.
The government might want to accept a single digital currency that all can use. The Central bank is carrying out its job to try out how a digital central currency works. Experts believe that digital currency will soon be accepted as a means of payment and a legal tender in the country.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
