RUSSIA ROLLS OUT FRAMEWORK FOR LAWS REGULATING CRYPTOCURRENCIES

Wed 09 February 2022:

According to local Russian media reports, Russia may become the latest government to recognize and regulate cryptocurrencies.

“The government and the Bank of Russia have agreed on a future regime for the circulation of cryptocurrencies in Russia. Before February 18, they will prepare a draft law on the circulation of digital currencies in the Russian Federation, in which cryptocurrencies are recognised as an analogue of currencies, and not digital financial assets,” said Russia paper Kommersant as reported by CNBC.

If true, this would be a significant shift from Russia’s central bank’s position last month, which called for a blanket ban on cryptocurrencies.

If the law mentioned in Russian media is passed, only owning bitcoins, not other activities, will be legalized in the country, according to sources.

Since 2020, cryptocurrencies have been recognized as legal tender in Russia. However, cryptocurrency payments have yet to be approved. In the past, authorities in the country have raised concerns that cryptocurrency could be used to fund illegal operations. According to Kommersant, if a law is passed, it might take effect in the second half of 2022 or the early part of 2023.

However, the report suggests that transactions made using cryptocurrencies that amount to more than 600,000 rubles (about $8,000) may get declared illegal.

While the regulation of cryptocurrencies has been the subject of heated debate in Russia for years, digital tokens are still in a gray zone. The situation around the tokens has been further complicated by the stance of the country’s Central Bank, which reportedly pushed for a blanket ban on cryptocurrencies. While the regulator’s head, Elvira Nabiullina, has openly voiced her skepticism about the tokens, she stopped short of an explicit call to make them illegal.

“There are big risks for small investors due to high volatility, cryptocurrencies are often used for illegal operations, criminal in their essence, they are not transparent, so we cannot welcome investments in such assets,” she said late in December.

However, according to the study, transactions involving cryptocurrency worth more than 600,000 rubles (about $8,000) may be considered illegal.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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