Russia’s recently revised bill “On Digital Currency” limits crypto purchases for non-qualified investors while providing legal ground for some cryptocurrency payments, according to local media. Proposed by Russia’s finance ministry, the draft law also imposes stringent requirements on platforms that operate with digital assets.
Russian Citizens Who Don’t Pass Test to Buy Only $600 Worth of Crypto Annually
The Ministry of Finance of Russia recently submitted to the government an updated version of its bill “On Digital Currency” designed to comprehensively regulate the country’s crypto market. Details about the law’s provisions have surfaced in Russian media reports this week.
According to the draft, qualified investors, or “professional purchasers of digital currency” as they are now described, will have unrestricted access to crypto assets. The limit for ordinary Russians is 600,000 rubles, which amounts to approximately $7,000 per year. A maximum amount of $7,000 worth cryptocurrency per year will be available to ordinary Russians. And that’s after they take a special exam.
Russian citizens who do not pass the exam will not be permitted to acquire coins of a value greater than 50,000 rubles per year (around $600 at current exchange rates). This is according to Interfax, which quoted a source with knowledge about the matter.
The new law defines the term ‘digital currency’ as “a set of electronic data contained in an information system that can be accepted as a means of payment that is not the monetary unit of the Russian Federation, or as an investment.” Digital currency is considered property in Russia, the report notes.
This language seems to give the legal foundation for cryptocurrency payments. However, it states in the bill that Russian legal entities including foreign subsidiaries and international organizations, as well as Russian citizens who have been in Russia for less than 183 days in a 12-month period, can not accept digital currency for payment.
Although the Russian finance ministry lobbying has led to the legalization of cryptocurrency in Russia. However, the central banking has opposed this idea and proposed a ban against crypto-related activities including the issuing and trading of digital coins. Most other institutions in Moscow are backing the Minfin’s approach but there’s also a general consensus against allowing payments with any other currency than the ruble.
Russia introduces strict standards to cryptocurrency companies
The draft law “On Digital Currency” is going to impose strict requirements for crypto platforms working in the Russian Federation. An “exchange operator,” which offers purchases and sales of digital currency on its own behalf and at its own expense, will have to keep at least 30 million rubles of capital. The mandatory threshold for “operators of digital trading platforms,” or those “conducting organized auctions,” is 100 million rubles.
These businesses, should the bill be adopted as it stands, will also have many other responsibilities. They’ll need to prepare annual reports and keep records of owners of digital currencies. An authorized government body will license and supervise the activities of service providers.
The requirements are “extremely overstated” and only the largest financial institutions will be able to meet them, blockchain lawyer Mikhail Uspensky commented for the Kommersant. Additionally, crypto operators will only be allowed to apply from Russian entities. Foreign exchanges, for example, will have to establish a local subsidiary to obtain a license but many of them may be prevented from doing so by mounting western sanctions over Russia’s war in Ukraine.
According to the Russian Business Daily, only authorized users can buy or sell digital currencies. Fiat withdrawals and deposits will only be possible through bank accounts. Crypto platforms will have to notify the Rosfinmonitoring financial watchdog about suspicious transactions. “Electronic wallets for digital currencies” will be subject to mandatory certification, although this applies only to wallets within the Russian crypto infrastructure.
The bill “On Digital Currency” allows both companies and individual entrepreneurs to engage in crypto mining, once they register with the government. If the amount of electrical energy used to mint digital coins is below certain levels, registration for these private individuals is not necessary.
The law will be effective if approved by Russian legislators. The State Duma is the Russian lower house and currently reviewing amends that would regulate taxation for crypto-related activities in the country.
Do you think Russia will implement the strict regulations for crypto platforms envisaged in the draft law “On Digital Currency?” Share your expectations in the comments section below.
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