Russia’s president Vladimir Putin signed a bill prohibiting payments using digital assets. The legislation obliges exchange operators to refuse to process transactions facilitating the use of DFAs, a legal category currently covering cryptocurrencies, as “monetary surrogates.”
Putin Signs Law banning Digital Asset Payments in Russian Federation
Russian President Vladimir Putin has signed an order limiting the use digital financial assets (DFAs), as a payment method within his country. This was reported by the crypto section of the RBC news portal. It also covers utilitarian data rights (UDRs).
Russia is yet to comprehensively regulate cryptocurrencies, but the law “On Digital Financial Assets,” which went into force in January 2021, introduced the two legal terms. Russian officials previously indicated that DFA includes cryptocurrencies and UDR covers various tokens. This fall, Russian lawmakers will review a new bill “On Digital Currency” designed to fill the regulatory gaps.
The legislation approved now by Russia’s head of state was filed with the State Duma, the Russian parliament’s lower house, on June 7 by the Chairman of the Financial Market Committee Anatoly Aksakov, and adopted a month later. Until now, Russian law did not explicitly prohibit payments with digital assets, although “monetary surrogates” are banned and the status of the ruble as the only legal tender is enshrined.
While the bill outlaws the exchange of DFAs “for transferred goods, performed works, rendered services,” it leaves the door open for cases of DFA payments envisaged in other federal laws. Amid expanding financial restrictions, imposed as part of Western sanctions over the invasion of Ukraine, a proposal to legalize small-scale crypto payments in foreign trade with Russia’s partners has been gaining support in Moscow.
In addition to banning direct payments made with digital financial assets (DFAs), the law requires platforms that offer exchange services to deny any transactions which could result in the substitution of the Russian ruble by DFAs.
The new legislation will enter into force 10 days after its publication in Russia’s government gazette. Concerning exemptions, RBC reports that Russian lawyers have pointed out certain issues in the new legislation.
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