Russia’s Finance Ministry Submits Bill to Legalize Crypto Investments, Ban Payments – Regulation Bitcoin News

The Russian Ministry of Finance prepared and submitted A bill that expands crypto regulations for the government. The law “On Digital Currency” aims to introduce rules for investment in cryptocurrencies while at the same time cementing a ban on their use in payments.

Draft Law ‘On Digital Currency’ to Regulate Crypto Turnover in Russia

The Ministry of Finance of the Russian Federation has presented to the federal government in Moscow legislation tailored to fill the regulatory gaps in the country’s crypto space, remaining after last year’s enforcement of the law “On Digital Financial Assets.” According to an announcement published this week, the draft law “On Digital Currency” has been filed with the White House on Friday, Feb. 18.

To develop the new legal framework, the government gave the Treasury Department (Treasury Department) and CBR (Central Bank of Russia) the task. The ministry proposed last week that two laws be passed to regulate crypto markets. However, the institutions were opposed to each other. Meanwhile, media reports claimed the CBR had been creating its own bills in order to carry out its request for a broad ban on crypto activity.

Minfin’s legislation is based on its regulatory concept, approved by the executive power earlier this month. Many other regulators, as well as relevant government agencies, have supported Minfin’s view that regulation is needed for the entire industry.

The new law will continue to prohibit the use cryptocurrency as a payment method. This is one of few points that the CBR shares. They will instead be used primarily as investment tools. The ministry confirmed it had received Bank of Russia’s legislative amendments, noting that those which don’t contradict its approach will be considered.

A new bill will require mandatory identification of cryptocurrency investors

It introduces regulations for digital currencies exchanges, and any other platform involved in their turnover. They will be included in a list of special digital asset operators. The service providers must meet specific standards regarding corporate governance, data storage, reporting and internal audit. They also have to manage risk and provide capital. A licensed body will oversee the licensing of these entities and foreign exchanges must establish Russian representations.

According to the Finance Ministry’s document, only customers who pass identification should be allowed to purchase and sell cryptocurrencies. Additionally, withdrawals and deposits for cryptocurrency platforms cannot be made through non-traditional financial institutions. “Thus, the identification of customers will be carried out both by [crypto] operators when accepting customers and by banks when opening a bank account,” the department elaborated, adding that banks and crypto firms will notify the Rosfinmonitoring watchdog about suspicious transactions.

Citizens will need to be informed by cryptocurrency exchanges about potential risks in the acquisition and use of digital assets. Non-qualified investors will be able to buy up to 600,000 rubles’ worth of cryptocurrency a year (approx. After passing an online assessment, you can purchase $7,000. The annual limit for non-passers will be 50,000 rubles, or just over $600. Qualified investors or legal entities are exempted from such restrictions.

Minfin considered crypto mining as well, and defined it to be an activity for obtaining cryptocurrency. The Bank of Russia suggested it be banned. However, Russian officials from Moscow and other energy-rich Russian areas have called to recognize it as an economically profitable activity that would enable the government access its profit margins. In January, President Putin highlighted the country’s “competitive advantages” in regards to the minting of digital currencies.

Do you expect the Russian parliament to support the finance ministry’s draft law “On Digital Currency?” Tell us in the comments section below.

Lubomir Tatsev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.