During a government meeting on 26th Nov, Mikhail Mishustin, the Prime Minister of Russia, announced that the government intends to acknowledge digital financial assets as property. The holders of cryptocurrencies will claim and protect their property rights and interests in Russian courts.
Mishustin said that the demand for cryptocurrencies had risen; thus, the government saw the need to regulate the crypto market reasonably. The PM drafted a plan to institute some adjustments in Russia’s tax code to protect crypto holders.
Mishustin is well conversant with economics. Initially, he was the Federal Taxation Service Director before assuming the PM office early this year. He said that digital financial assets are fresh in the market, and Russia needs a robust regulatory framework to protect crypto owners’ rights.
Lawmakers have been in talks to treat bitcoin as taxable property, but it’s still not official. Different courts have resolved to recognize the cryptocurrency as property. Sometime this year, a Russian court denied a crypto owner the return of cryptos, including bitcoin, since they did not view it as property under the law. Therefore, theft was not a crime. Late last year, the supreme court ruled assets as tokens.
Uncertainty Encircling Cryptocurrency in Russia
Russia struggles with a coherent administrative structure for cryptocurrencies, despite getting consent from the Digital Financial Assets and Digital Currency Act. For a long time, the country has viewed BTC and other digital assets with considerable skepticism. Recently Finance Magnates reported about a statement issued by the Russian Finance Ministry to take stringent actions against under-reporting of digital assets. The country hopes to amend the unsettled crypto environment.
The new announcement on the government’s position on crypto came after years of uncertainty. The lawmakers previously moved a bill requesting a ban on all crypto trading services in the country, terming them illegal, but got resistance from existing Russian crypto businesses. With uncertainties surrounding cryptos, Russia’s President Vladimir Putin signed a law blocking residents from making payments with crypto in July this year.
Effects of The New laws
The PM said that the government would make some changes to the Tax Code. Digital financial assets will be perceived as property. The holders will be able to count on legal protection in the event of any malpractice and further defend their property in a court of law.
The new laws to regulate cryptocurrencies will be implemented in 2021. Nonetheless, experts believe that this will not alter the country’s existing crypto industry as the bill only gives a legal definition to digital currencies.