Tuesday, December 7, 2021

Russian Legislators Propose New Rather Strict Crypto Regulations

Russian Legislators Propose New Rather Strict Crypto Regulations

A new draft law on crypto regulation has been proposed in Russia, stipulating what seems to be strict control over the crypto space and limiting access to the market for foreign players.

Also see: Coinbase Ethereum Smart Contract Bug Discovered, Bounty Paid

Subscribe to the Bitsonline YouTube channel for more great interviews featuring industry insiders & experts

Potential Basis for Future Regulatory Model in Russia

The draft was submitted by a group of legislators led by Anatoly Aksakov, head of the financial markets committee at the State Duma, Russia’s lower chamber of parliament, and is likely to become the basis for crypto regulation in the country.

Under the draft, cryptocurrency miners shall be considered entrepreneurs and will have to apply for proper registration or face punishment for illegal entrepreneurship. Along the same lines, miners will have to declare their incomes, but they will be exempt from taxes for the first two years.

In another major move towards regulation of the crypto space, the draft stipulates that cryptocurrencies and tokens could legally be exchanged for rubles and other fiat currencies, but they would be treated as securities and be subject to applicable requirements from the central bank.

In practice, it means that cryptocurrencies and tokens will only be allowed to be traded at a handful of approved exchanges. Although the regulator is yet to come up with the specifics, rules are likely to be too complicated, discouraging crypto investors, especially foreign ones, from dealing with officially-approved exchanges.

Most likely, Russia’s leading bourse, the Moscow Exchange (MOEX), which said it will be preparing an infrastructure for a cryptocurrency trading platform back in August 2017, will be among the first exchanges allowed to deal with crypto.

However, the draft has no mentioning of a national crypto exchange, the idea of which has been floated over the last few months.

Some Old Ideas Nixed

Meanwhile, the new draft doesn’t include some restrictions that were previously discussed by Russian regulators. Earlier proposals stipulated a cap of 50,000 rubles ($872 USD) on a single purchase of tokens or cryptocurrencies by unqualified individual investors and an annual cap of 500,000 rubles ($8,720).

This doesn’t mean, however, that there will be no restrictions. According to local media reports, the exact size of caps is expected to be determined later.

The increased role in crypto regulation stipulated for the central bank may also mean more restrictions will be fothcoming. The regulator is known for a stricter stand on cryptocurrencies compared with the finance ministry. Earlier, the central bank said only state-approved tokens should be allowed to circulate in Russia, while cryptocurrencies should be banned.

There is no timeline for adoption of the crypto draft in question, but more decisions regarding crypto regulations in Russia are likely to come soon. On March 22, deputy prime minister Arkady Dvorkovich said that Russia will have a finalized regulatory model for the space within a few months.

What do you think? If these regulations pass, will they help or hurt the adoption of crypto in Russia? Sound off in the comments below. 

Images via CNBC, vijesti.me

Bitsonline Email Newsletter