Russia will ban cryptocurrency payments starting next year, following a new law signed by President Vladimir Putin.
This decision is the result of the recent statement of the Russian regime, where they allege that the legalization of activities related to cryptocurrencies poses certain risks. However, as an alternative, the law supported transactions with so-called digital financial assets (DFA), which are token securities.
Putin signed the new bill on Friday, and it had been approved by the State Duma (Russian parliament) last week. The law takes effect in 2021 and would prohibit local cryptocurrency merchants, or users from buying goods, and services in the country using their tokens.
Furthermore, the bill proposes that individuals and government officials who got a restriction from creating or owning accounts abroad cannot hold digital currencies either. Among other concerns, the ban on cryptocurrency payments, as proposed in the bill, tends to ensure that the ruble, the money of the Russian central bank, is the only legal tender.
A more specific law regulating businesses related to cryptocurrencies is expected to be passed later in the remainder of the year, although no date has been disclosed.
Protecting the Ruble is the Goal.
The Russian government sees digital currencies not only as a means of payment but also as another means of saving and investing. This is a statement by the head of the State Duma Committee on the Financial Market, Anatoly Aksakov. The bill effectively aims to protect the only legal tender, the ruble.
While cryptocurrency payments become illegal in Russia by 2021, the bill allowed the issuance of digital financial assets (DFA); however, under the supervision of Russia’s central bank. With the approval of the central bank, other commercial banks and companies can operate with the financing agreements. Unlike cryptos that can serve as a payment method, DFAs cannot be used to pay for goods.
This statement means that companies can issue digital securities (tokens) on a blockchain if they are duly registered with the Bank of Russia as issuers and meet specific criteria.
The previous version of this bill, which had submitted to the State Duma, would make the issuance and trading of cryptocurrencies in Russia illegal.
Bank of Russia against cryptocurrency trading
Despite local lawmakers advancing regulatory frameworks applicable to cryptocurrency trading within the nation, the Bank of Russia still maintains a stance against these assets seeing business opportunities within the country.
The BoR contributed to the discussions for the creation of a bill launched during the third quarter of 2019, where it shared some provisions for companies, and token issuing entities, among which he highlighted that they must have a capital of at least some USD 660,000, and guarantee total access to the data of the Blockchain network in case it is required.
By Jenson Nuñez
