Russia’s Crypto Rollercoaster Draws to a Close Amid Plans to Legalize Cryptocurrencies
The news in town is that Russia intends to release a bill to legalize bitcoin and other cryptocurrencies this month.
According to Tuesday’s announcement, the Russian government and the country’s central bank have reached an agreement. They’ll work on legislation or changes to existing laws that recognize cryptocurrencies as a kind of money.
Russia’s Financial System to Incorporate Cryptocurrencies
Russia’s crypto journey has left the worldwide market confused. From its intention to ban digital assets to incorporating crypto into its financial system, Russia has completely reversed its course on its cryptocurrency policy.
The Russian government and central administration have published a report indicating that they will present a crypto regulatory draft by February 18. The agreement is a significant turnaround, given that the Bank of Russia had previously proposed banning miners and several other cryptocurrencies over worries that they might endanger the country’s financial system.
On Tuesday, the agreement was reported by several news outlets, including Kommersant. It is expected that cryptocurrencies will be classified as regular currencies such as the ruble rather than digital financial assets. The legislation is expected to be finished before February 18.
The Russian government is developing a framework where digital assets will be handled solely via banking systems or licensed intermediaries. Any activities outside of the legal realm will be considered criminal misconduct. Illegally receiving crypto as a means of payment also carries hefty penalties.
Legalization Plans Into the $2 Trillion Crypto Market
One of the main aims of Russia’s crypto policy will be to integrate digital assets into the country’s financial system. The government stated that this would protect the rights of ordinary private investors while also preventing the use of digital assets in money laundering. This is why the Russian government is trying to maintain control over credit flows via “the circuit of credit institutions.
According to the document, any amount above R 600,000 ($8,016) must be stated during operations. Transacting outside the legal boundaries will be regarded as a crime, and fines will be issued for their illegal use as a payment mechanism.
There are further plans to impose an “obligation” on market participants to inform Russians about the dangers of digital assets. The Ministry of Finance, the Federal Security Service, the Ministry of Internal Affairs, the Federal Tax Service, and other Russian agencies were all involved in the decision-making process.
Following talks with Deputy Prime Minister and White House Chief of Staff Dmitry Grigorenko, the government debuted the approved “Concept for regulating the mechanisms for organizing the circulation of digital currencies.” The Ministry of Finance’s key points is largely reflected in the final concept.
According to the ministry, the Bank of Russia and the Russian Ministry of Finance must complete either a separate bill or amendments to CFA law and other laws by February 18. The new regulations will be implemented in 2022 or 2023.
The concept doesn’t delve into the specifics of the “transition period” or mining. In the meantime, they are essential: turnover regulation will necessitate quick judgments from cryptocurrency owners on whether to enter the developing legal market sector, sell assets, or stay in the illegal industry.
