Does Russia hate digital currency?

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Recently, a number of draft bills have surfaced in Russia that would prohibit and criminalize digital currency if they were to become law. The bills penalize individuals and companies who make payments or are looking to buy/sell digital currency with expensive fines and jail time. Many people are calling the draft bills “anti-crypto.” 

The details

The bills were reportedly drafted by staff at the Digital Economy think tank and the Skolkovo business accelerator. The bills prohibit using digital assets as a means of payment, purchasing digital currencies with cash or by transferring funds to Russian bank accounts, and disseminating information regarding digital currencies. 

The only way that an individual or company is allowed to partake in any sort of digital asset activity under the new bills would be if they submit a declaration and receive a court order that permits it, or if they receive digital currency via an inheritance transfer.

The penalties 

The proposed bills include strict penalties for those who break the law. If individuals continue to issue digital currency to others under these laws, they would have to pay a fine ranging from 50 to 2 million rubles ($.70 to $28,000)

If an individual participated in a digital currency transaction—using digital currency as a means of payment—they would have to pay a fine ranging from 20 to 1 million rubles ($.28 to $14,000) or could face up to 7 years in jail.

Regardless of how an individual breaks the proposed laws, the digital currency involved would be confiscated by authorities.

Preventing the development of Russia’s digital asset industry

If these proposed bills are put into law, they would cripple the development of Russia’s digital asset industry.

“In general, the package of bills is clearly aimed at preventing the development of cryptocurrency projects on the territory of the Russian Federation,” Efim Kazantsev, an expert at Moscow Digital School, told ForkLog.

“Companies associated with cryptocurrency circulation and blockchain platforms, in the event of the adoption of this package of bills, will either have to completely shut down or seriously rebuild and get all the necessary permissions.”

If the proposed bills become law, then the digital asset industry in Russia pretty much comes to an end. If businesses or individuals wish to keep working with digital currency under these laws, they would have to jump through multiple legal hurdles to receive the necessary permissions to keep operating. Lucky for them, the bill is a long way off from being passed, and is currently being reviewed and commented on by Russia’s Ministry of Economic Development.