The Russian Parliament passed a bill that has given cryptocurrencies like bitcoin legal status. However, Russians cannot use them as a means of payment.
Russian legislators approved the Digital Financial Assets (DFA) bill on Wednesday, July 22, 2020. This followed a successful third and final reading. According to Anatoly Aksakov, the bill now defines what a cryptocurrency according to the law. The law states:
“Essentially the cryptocurrency is a complex of digital data, a digital code or a reference that is stored in the information system.”
Cryptocurrencies as an Investment
According to a report by Tass, the law now recognizes digital assets as:
“An aggregate of electronic data capable of being accepted as the payment means… [but] cannot be used at the same time to pay for any goods and services.”
The bill has to go now to the upper house of Parliament and then to the Kremlin, just a formality. The bill will come into force in January 2021. While Russians are now free to legally buy and hold bitcoin and other cryptocurrencies as an investment, the law demands that:
“Possession of digital currency, its acquisition and transfer by legal means are allowed only if declared […] the central bank will have the right to determine features of digital assets accessible by qualified investors only.”
Take Effect on January 1, 2021
Possession of bitcoin in Russia has always been held with a lot of skepticism. The new law that approves digital assets is a watered-down version of the original bill. The earlier version proposed hefty fines of up to $7,000 or seven years in jail for buying bitcoin. The law had planned to punish institutions issuing cryptocurrencies without the Central Bank’s approval with fines of up to $28,000.
The latest draft says cryptos are now kind of like property that one can buy, sell, and invest. However, it can’t be accepted as a payment means. Yuri-de-Gaia tweeted:
“The Russian Duma has passed the “digital asset” law that will take effect on January 1, 2021.
– buying and selling
– accepting and promoting as a method of payment”.
The Russian Central says “The draft law introduces the definition of digital currency. The authorities once declared cryptocurrencies illegal saying they could be used in money laundering or financing terrorism. The government changed its position in 2018 and promised to regulate the cryptocurrency market. The regulation has been delayed, and now Russian crypto lovers find themselves in a Catch-22 situation.