The status of cryptocurrency regulation in Russia

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Russia has banned the use of cryptocurrency as a form of payment after it signed a strict new bill into law over the weekend. The ban is part of a bill to regulate online money that is called digital financial asset (DFA) transactions. The regulation gives cryptocurrency a legal status in Russia, and means cryptocurrencies like Bitcoin can be sold, purchased, and exchanged.
Russian banks and finance exchanges can also sell and buy cryptocurrencies, but they have to be registered with Russia’s Central Bank. However, they can’t be used as a means of payment to buy something. The law is not due to come into force until January 1 2021.
Moreover, the amount of cryptocurrencies in Russia will be limited, according to Russia’s RIU news agency.
In Russia, cryptocurrencies are now a form of property, and should be properly disclosed for tax purposes. In addition, Russians can challenge cryptocurrency transactions in court, but they must declare their own possession of cryptocurrency.
This regulation states digital financial assets are recognized as “digital rights comprising money claims, ability to exercise rights under negotiable securities, rights to participate in equity of a non-public stock company and right to claim transfer of negotiable securities set in a resolution on the DFA issue.”
Regarding digital asset trading by banks, it states: “The central bank is vested with the authority to maintain the register of information systems and the register of operators of digital financial assets exchange and supervise the business of information system operators.”
Anatoly Aksakov, head of Russia’s Duma Committee on the Financial Market, told RIA another cryptocurrency bill may be adopted in autumn this year. Although current regulation gives cryptocurrency a legal status in the Russia, the further bill will set out further regulation of digital currencies and concepts of it. The current bill doesn’t mention any cryptocurrency-related terms such as mining.
Analysts note the new law signed over the weekend appears to be a less severe version of a previous one. This would have made it illegal to trade cryptocurrency within Russia.
However, this resulted in outrage from the cryptocurrency community, which sent multiple letters in protest. The proposal was also criticized by the Russian Ministry of Justice and Ministry of Economic Development.
Bitcoin, as the biggest form of cryptocurrency by market value, crashed in price over the weekend, losing over $1,450 in less than an hour on Sunday. The price tumble followed a sharp rise in price towards the end of last week, according to price indexes.

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