Russia moving a step closer towards crypto legalization

Russia moving a step closer towards crypto legalization

Government
February 10, 2022 by Editor's Desk
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The Russian government and their central bank have reached an agreement on regulating digital assets. That marks a notable moment in history for cryptocurrency. The Russian government and the country’s central bank have agreed to draft legislation or amend existing laws that would create the framework for crypto-currencies to be recognized as a form of
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The Russian government and their central bank have reached an agreement on regulating digital assets. That marks a notable moment in history for cryptocurrency.

The Russian government and the country’s central bank have agreed to draft legislation or amend existing laws that would create the framework for crypto-currencies to be recognized as a form of currency. This is according to a statement on Tuesday.

Russia aims to integrate blockchain-based digital currencies into its financial system while overseeing how banks use cash. This will help to regulate their use and reduce the risk of bribery, for example.

Crypto will only be used as currency once the user has done proper identity checks by interacting with their country’s banking system or authorized intermediaries. At the same time, no operations exceeding R 600,000 ($8,016) need to be declared, according to the document.

Transaction outside the legal parameters will be considered a crime, and fines for the illegal marketing of cryptos will be charged.

The Russian government and the country’s central bank, the Bank of Russia, appear to have agreed on how to regulate Bitcoin and other cryptocurrencies. They plan on recognizing them as currency but with certain limitations in mind. The decision from the Bank of Russia has been a U-turn as they previously suggested a ban on crypto activity just a month ago, citing potential financial risks.

A Russian news publication called Kommersant recently reported that the government and the Bank of Russia had reached an agreement on how to regulate cryptocurrencies. Authorities are now preparing a draft law, expected by February 18th, which will define crypto as an “analog financial instrument.”

Financial stability is important to all citizens, not just Russians. However, the Bank of Russia has recently pushed for an all-encompassing crypto ban in a report issued in January 2018. The industry poses a huge speculative risk to the future of the Russian economy and should be discouraged accordingly. Bank of England wants to prevent banks from facilitating cryptocurrencies transactions.

It appears that transactions larger than 600,000 Russian Roubles (Rs. 6 lakh) will not escape from the government’s tax net. If you illegally accept crypto as a means of payment, you will also face penalties.

In addition to this report, a supporting draft document is also linked. This document claims that the regulation would ensure citizens’ rights are protected. Under a licensing regime for cryptocurrencies, providers will need to have “financial airbags.”

“The complete absence of regulation of this industry, as well as the establishment of a ban, will lead to an increase in the share of the shadow economy, an increase in fraud cases, and destabilization of the industry as a whole,” says the document.