Deemed Russian Cryptocurrency Law Permits Investment, but Not Commercial Transactions
In Russia, the Finance Ministry has sent the government a proposal of rules for the use of cryptocurrency. Russia’s Finance Ministry published a statement Monday saying that the plan would enable Russians to invest in cryptocurrencies like Bitcoin, but will not permit them to buy goods and services.
Cryptos have been a subject of a long-running debate in Russia between the government and the country’s central bank. A week after the country’s central bank asked for a prohibition on Bitcoin mining and crypto dealings, the Finance Ministry stated it was “essential” to enable cryptocurrency innovation to thrive.
Shortly thereafter, President Vladimir Putin stated that Russia had “some unique strength” in crypto mining owing to “the abundance of power and knowledgeable individuals present in the nation,” and urged the Finance Ministry and central bank to achieve an agreement.
“The Russian Federation will strive to outlaw the usage of cryptos as a payment method. Crypto currencies are solely treated as a vehicle for investment under the draft bill “ per the statement.
A permit and registration with the government are only available to cryptocurrency exchanges that meet specific requirements. The significance of KYC (know your customer) verification with cryptocurrency exchanges and financial institutions was also emphasized.
Citizens interested in investing in cryptocurrency would have to take the test that checks their investment understanding, as per the statement. If you pass the test, you’ll have the option of investing up to 600,000 Russian rubles (roughly $7,505) a year in cryptocurrency, whereas those who fail would be restricted to only 50,000 rubles.
In Russia, the cryptocurrency world is booming, especially Bitcoin mining, which involves employing powerful processors to validate blocks of transactions and create fresh coins or crypto tokens. Furthermore, 10% of the computational power utilized on the Bitcoin network is presently provided by miners in Russia.
The message didn’t go into much more depth on the manner in which the Bitcoin mining sector in Russia will be governed, instead merely stating that “the notion of virtual mining as an endeavor carried out to gain cryptocurrency is codified.”