Putin Signs Law Banning Payments With Digital Assets In Russia

July 16, 2022 2:25 pm Comments

Russian president Vladmir Putin just signed a new law that would essentially ban all payments from being done with digital assets.

This creates a major restriction on how digital assets can be used within Russia and indicates that crypto regulations within the nation are constantly changing.

The country had recently seemed to gain a more favorable view on the crypto industry due to geopolitical conflicts, but it seems that there are concerns about these alternative payment methods replacing the Russian ruble.

More changes from a regulation standpoint are expected in the fall of this year as Russian lawmakers will be reviewing a new bill called “On Digital Currency” which is intended to clarify unclear regulations.

Bitcoin.com reports:

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.

The banning of direct payments using crypto is not the only thing that the law will be enforcing on Russian citizens.

Additionally, it will require all platforms that offer exchange services to reject any transactions that might utilize DFAs that could potentially replace the  Russian ruble as the medium of transaction.

As a result, it seems that fiat currency will still have quite a big role to play in the near future as fiat and crypto will need to figure out how to coexist.

The new legislation is expected to take effect 10 days after its legal publication and speculators are uncertain if this ban will be permanent or if it has a chance of being removed in the future.

After all, there are already multiple legal controversies that have come out of this new legislation.

CoinTelegraph reports:

Cointelegraph reported in June that the bill introduced the concept of an “electronic platform” — a financial platform, investment platform or information system in which digital financial assets are issued.

Under the recently passed law, these platforms will likely be required to submit transactions and actions to the Russian central bank’s registry as part of the national payments system.

Russia’s Parliament is currently considering two other bills related to digital assets. One will potentially regulate crypto miners’ activities in the country, requiring them to follow a certain procedure to register as sole proprietors or self-employed.

Another, named “on digital currency,” proposed requirements for firms handling digital asset transactions, including licensing and disclosure about risks and data privacy.

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