Russia works to embrace crypto, but not without new limitations

The political landscape has changed a lot for Russia (adversely) in just a couple of months. This is maybe the reason why they’re now working to embrace crypto. A new bill could bring new rules for crypto companies in Russia but also would open the door to digital assets.

According to recent reports, the pending legislation “On Digital Currency” just suffered some modifications to include more crypto activities, like mining. It’s believed that this law may lift the current ban on crypto payments, but other sources indicate this isn’t the case. Paying for goods and services with crypto in Russia will still be illegal.

The draft law also includes provisions to use cryptos as investment vehicles, “touches upon mining in detail,” and also describes more rules for crypto trading companies —including crypto exchanges. In the last case, the companies would need to register a Russian subsidiary and count with minimum reserves of $36 million to get a license.

Annual reports, AML measures, internal audits, keeping registries of crypto owners, and requirements for management bodies are other rules included in the bill for corporate traders and exchanges. Therefore, we can say that the users of Russian crypto exchanges and trading firms won’t have a lot of privacy in the eyes of the government.

And that’s not all for them. Qualified investors will have unlimited access to crypto, but ordinary investors will need to pass a test before purchasing, with a limit of only $7,000 every year. Those citizens that don’t pass the exam will only have the choice to buy $600 annually.

Likewise, fiat deposits and withdrawals will be only allowed for identified users through bank accounts. The mining will be permitted for everyone, but not tax-exempted. If approved, this law will be applicable starting in 2023.

More crypto in Russia

Last month, Sberbank, one of the largest banks in the country, was provided with a license to issue digital assets. So, Russian companies can partner with this institution to create their own digital assets on the blockchain, if they have the cash requirements. Besides, companies will also be allowed to use and invest in other tokens issued by Sberbank.

The initiative comes after the Sberbank lost 95% of its value on the London Stock Exchange in early March. That was because the institution was pulling out from the European market due to the recent war against Ukraine. The multiple sanctions applied to Russia are severely affecting its economy.

That’s also why there are speculations about the country accepting cryptocurrencies as a payment method for oil and gas exports. They’re the world’s largest oil exporter, and the European Union is the largest buyer of Russian oil. The United States banned imports from Russia, but that’s still a hard measure to take for the EU.

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