Key Takeaways:
- The Russian government and the Bank of Russia have agreed on a future regime for the circulation of cryptocurrencies in Russia.
- By February 18, they will prepare a draught law on the circulation of digital currencies in the Russian Federation.
- The law will recognise cryptocurrencies as currency analogues rather than digital financial assets (DFA).
- The new rules will take effect in the second half of 2022 or in 2023.
The Russian government and the Bank of Russia have agreed on a future regime for the circulation of cryptocurrencies in Russia. By February 18, they will prepare a draught law on the circulation of digital currencies in the Russian Federation. The law will recognise cryptocurrencies as currency analogues rather than digital financial assets (DFA).
Digital currencies circulation in the legal sector will be possible only with full identification, through the banking system or licensed intermediaries. Transactions in excess of 600,000 rubles must be declared; transactions in excess of this amount will be considered a criminal offence and an aggravating circumstance under the Criminal Code. Fines will be imposed for the illegal acceptance of cryptocurrencies as a means of payment. Mining and related issues of DFA are not affected by the concept within which the project is being prepared.
Following meetings with Deputy Prime Minister and White House Chief of Staff Dmitry Grigorenko, the government published the approved “Concept for regulating the mechanisms for organising the circulation of digital currencies.” The final concept is mainly based on the positions of the Ministry of Finance.
Until February 18, the ministry and the Bank of Russia must formulate either a separate bill or amendments to the law on the CFA and other laws for its implementation. The new rules will take effect in the second half of 2022 or in 2023.
The concept does not go into detail about the “transition period” or mining. In the meantime, they are critical: the regulation of turnover will necessitate quick decisions from cryptocurrency owners on whether to move into the emerging legal market segment, sell such assets, or remain in the illegal sector.
The main distinction between the concept, which, in fact, implements the Central Bank’s strong distrust of cryptocurrency, is the proposal to develop amendments to the Criminal Code and the Code of Criminal Procedure, according to which evading declaring cryptocurrency transactions will become a criminal offence, and its use will become an aggravating circumstance in other offences.
In the jurisdiction of the Russian Federation, the possession of cryptocurrency and transactions with it are not prohibited. It is not prohibited only through an “organiser of the digital currency exchange system” (a bank with a universal licence) or a p2p exchanger legalised in the Russian Federation.
The mode of operation of the legal segment involves the full identification of the client according to banking rules, work taking into account AML / CFT requirements, all information about transactions through the Transparent Blockchain system of Rosfinmonitoring will be available for state control in the same way as transactions with non-cash rubles or foreign currency on bank accounts.
The concept, on the other hand, describes the mode of control of individual transactions with cryptocurrency as being not dissimilar to the mode of control of cash transactions with any currency. Most likely, the main “for” argument was that the United States, the European Union, and Japan are inclined to the same or strict bans as China, which was also proposed by the Bank of Russia.
