- A new proposal from the government
- The current situation
- The potential of cryptocurrencies in Russia
Although Russia adopted its first cryptocurrency law in January 2021, the new law did not make anything clearer. Russian cryptocurrency market is not sufficiently regulated, and the international economic community is still uncertain about its potential.
Cryptocurrencies were allowed in Russia starting January 1, 2021, but they cannot be used in exchange for goods or services. Therefore, Russian citizens can mine, trade and own cryptocurrencies so long as they do not spend it on goods and services which is illegal.
The Prosecutor General’s Office suggested that cryptocurrency should be defined as property in the Criminal Code of Russia. According to rumors, Russian politicians are discussing a new law which will allegedly help to “protect” non-professional investors from hasty investment choices concerning digital assets.
According to Anatoly Aksakov, Chairman of the Committee on Financial Markets of the Russian State Duma, Russia needs to adopt new legislation that will impose stricter rules for crypto and trading.
“Digital assets are the topic of our close attention, and here we will look at how to protect our citizens as much as possible when investing in digital currencies and digital assets, because here is a new tool, and it is quite difficult for an unqualified investor,” he commented.
Igor Krasnov, the Prosecutor General of Russia, stated that his office has prepared a draft law that will recognize virtual assets, including cryptos, as property. Krasnov commented that the legal definition will be used in criminal proceedings and voiced concerns about the rise in crimes involving new financial technologies.
Currently, cryptocurrencies are not sufficiently regulated in Russia, with the only official regulation being the law “On Digital Financial Assets” that was put into force in January 2021. While this law defines terms and rules related to crypto and associated activities such as “issuing digital currency”, it does not touch upon other subjects, including cryptocurrency mining or payments.
While many Moscow officials have stated their support for recognizing mining as an entrepreneurial activity, the Bank of Russia is still opposed to the idea of the free cryptocurrency circulation in Russia. Elvira Nabiullina, the head of Bank of Russia, believes that Russia needs the digital ruble, while other cryptocurrencies such as Bitcoin should be banned due to their “risks to financial stability”.
So far, the future of digital currencies in Russia is unclear. While the government has mentioned its plans of developing its own regulated cryptocurrency, currently, owners of undeclared crypto in the amount of $1,300–13,000 can face fines and even time in prison.
Russian President Vladimir Putin has recently raised hopes by speaking about the tolerance of Bitcoin and other digital assets and stating that they “have the right to exist and can be used as a means of payment”. At the same time, he clarified that using cryptocurrencies for trading oil and other Russia’s biggest export commodities is still out of the question.