Digital currency to be ‘taxable property’ in Russia

Getting your Trinity Audio player ready...

Digital currency is to be regulated as ‘taxable property’ in Russia, following an overhaul of draft legislation on the sector.

The developments are the latest twist in the road as Russia looks to develop a system of regulating virtual currency and digital assets through its long-awaited bill, according to local media reports.

The latest amendments mean it will no longer be an offence punishable by prison to facilitate digital currency trades in the country, following protests from the digital currency community and wider Russian government bodies.

Instead, the law will treat digital currency as a taxable property, but one that cannot be exchanged as a means of payment. Legal actions relating to digital currency will only be considered where the plaintiffs submit full disclosure on their digital currency holdings and transactions.

The bill says that a digital currency is a set of data that can be used as a means of payment or investment, with no central backing, apart from an operator or distributed nodes.

According to media reports, the measures are expected to stop inconsistencies in Russian courts when dealing with digital currency cases, by offering more clarity around the legal status and definition of digital currency.

Russian lawyer Mikhail Uspensky said that when the measures come into force in January, he anticipated minimal practical changes for the digital currency industry in Russia.

“The only thing outright prohibited is taking crypto as payment for goods and services, which was the Bank of Russia’s principal premise. But buying a cup of coffee for bitcoin is still a kind of exotic thing anyway.”

On the current draft bill, Uspensky said the measures were a compromise between the central bank and the digital currency community.

“They decided only to mention cryptocurrency in the bill so far and prohibit using it as a payment, but postpone deciding on more important issues, like the criminal cases [related to crypto], crypto OTC businesses, and so on.”