Gazprombank To Test Crypto Transactions Through Swiss Subsidiary

Gazprombank has decided to conduct pilot projects related to cryptocurrency through its subsidiary in Switzerland. The decision was announced by Alexander Sobol, deputy chairman of the board of Gazprombank. The bank has cautioned that it will be done on a small scale. Furthermore, the test will be conducted between the bank’s branches only. According to Sobol, the Russian State-owned bank is yet to decide whether to offer cryptocurrency related services to clients or use it for its own investment.

As Switzerland has a positive approach towards cryptocurrencies, Gazprombank, the third-largest bank in Russia by assets, decided to test cryptocurrency transactions through its subsidiary in that region. Presently, cryptocurrency transactions are not regulated by law in Russia. However, the State Duma is expected to enact a cryptocurrency law “On Digital Financial Assets” later this year. The law will provide the rules and regulations for dealing with cryptocurrencies in Russia.

While speaking with domestic news outlet Vedomosti, Sobol said

“Some kind of pilot – of course, yes. It will not be on a grandiose scale, but for yourself. There is a demand from large private clients for such services. Therefore, we are now looking at how we can organize this service for them”. Sobol also revealed that the bank does not have any preconditions for working with cryptocurrencies. He further stated “We are trying to follow the situation actively.”

In other news related to Russia, lawmakers are preparing an amendment to the tax laws to implement a 13% tax rate on cryptocurrency related incomes. The exact rates would be revealed later this year. Two bills have been filed in the State Duma in the past few weeks. The first bill “On Digital Financial Assets” is for regulation of cryptocurrencies. The second bill is to amend Russia’s civil code to introduce terms such as “cryptocurrency” and “digital money”. This is intended to protect investors’ interests.

Until the new tax rates are announced, Russian citizens will have to use a 13% tax rate for calculating their tax obligations on earnings from cryptocurrencies. This was explained in a Finance Ministry letter, in response to a private request (#03-04-05/66994) filed in October last year.

The tax rate is also applicable to foreign nationals who have not crossed the Russian borders for at least 183 days. In other cases, a tax rate of 30% is applicable. Furthermore, dividends, if any, are taxed at 6% for residents and 15% for non-residents.

The draft legislation, which is currently being prepared, defines cryptocurrency mining as an “entrepreneurial activity”. Corporate tax rate in Russia is around 24%, in general. The Russian tax officials are struggling to understand how cryptocurrency exchanges work and the process to be employed to identify wallet owners.