Prime Minister: new Russian crypto-regulation will protect the users

Lately, the laws for cryptocurrencies are tightening in Russia. Exchange platforms like LocalBitcoins and Binance are being banned inside the country, and threats of prison are surrounding for the owners of non-declared assets. But not everything will be bad about this new Russian crypto-regulation if we trust in their prime minister.

During the last government session on Thursday, Mikhail Mishustin, the Russian prime minister, assured that the next regulations for cryptocurrencies inside the territory will be reasonable and designed to protect the users and avoid scams and fraudulent schemes. He declared:

“Another solution [for the economy] concerns to cryptocurrencies. This is a relatively new tool, whose interest is constantly growing, and the Government plans to lead the development of this market in a civilized direction so that the owners of such assets can protect their rights and interests, and the creation of shadow schemes would be difficult”.

According to him as well, Bitcoin and cryptocurrencies would be classified as property in the country. That implies taxes, but also the possibility for the users to seek relief in court if something goes wrong, like being a victim of a cryptocurrency scam.

Amid all the current ambiguous proposals, this is good news for the cryptocurrencyA digital currency running on a blockchain and built with cryptography. Contrary to central-bank issued currency, cryptocurrency issuance rules are... users in the country. And they’re not few, as it was indicated by Chainalysis’ 2020 Global Crypto Adoption Index. We can find Russia in there as the second country with the highest crypto adoption worldwide, only surpassed by Ukraine.   

Besides, at least 10% of all bank account holders want to invest in crypto, according to a poll done by the firm IDF Eurasia. So, despite the current legal uncertainty, it’s actually important to resolve this matter before an even bigger adoption comes over the country.

An ambiguous crypto-regulation

On one side, the hostility against cryptocurrencies is very present within Russia. It wouldn’t be till October 2017 that president Vladimir Putin would order the creation of a proper regulatory framework for these assets. A first draft was ready by January 2018, but it wasn’t very kind to cryptocurrencies.

Among other indications, cryptocurrencies couldn’t be traded against fiat, the Initial Coin Offerings (ICOs) would be aimed only at licensed investors and the mining would be taxable. However, last August, the ultimate version of the crypto-law was approved by the government.

In this new Russian crypto-regulation, cryptocurrencies are legal to trade and mine, but not in exchange for any goods or services inside the country. This law also allows issuing new tokens and open up cryptocurrency exchanges under the supervision of the central bank; all starting 2021.

Other proposals include punishing the owners of undeclared crypto wallets holding more than 1 million rubles (around $13,000), with fines up to 30% of their crypto and even 3 years’ prison sentence. Luckily, with the last declared intentions of the Prime Minister, the measures might be more flexible.

Featured Image by herbinisaac / Pixabay

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