New bill may pave the way for cryptocurrency payments in Russia

New bill may pave the way for cryptocurrency payments in Russia

A draft bill aiming to protect the rights of cryptocurrency owners was introduced by the minister of finance in Russia, in hopes of boosting cryptocurrency trade in the country. Apart from protection, the bill is expected to regulate the use of “digital money” for payments in the country, according to reports.

Bill No424632-7 shines a light on various cryptocurrency-related activities in the country, such as defining cryptocurrency as digital money and outlining digital rights of digital assets owners.  According to the ministry, the bill will allow authorities to tax the digital currencies to support the state budget. It also deals with other matters like inheritance rights and bankrupt claims of cryptocurrencies.

This new bill was co-sponsored by the speaker of State Duma, Vyacheslav Volodin, and the head of the parliamentary legislation committee, Pavel Krasheninnikov.  Once signed into law, the bill will regulate initial coin offerings (ICOs) and crypto mining, but bans cryptocurrencies. The fate of cryptocurrencies like Bitcoin will be decided by the Central Bank of Russia (CBR).

In an interview with Forbes, KickICO CEO Anti Danilevski said the draft law’s main goal is to define the scope of action and of regulation of cryptocurrency, and not the outright banning of cryptocurrency use in the country.

Russia previously said it would ban cryptocurrencies as they encourage illegal activities like money laundering and financial terrorism.

The bill has also defined bitcoin mining as an entrepreneurial activity that is aimed at creating cryptocurrency and/or validating transactions in exchange for payment in cryptocurrency. This could necessitate bitcoin miners in Russia to register as self-employed persons offering cryptocurrency-related services.

Crypto trade will only be allowed on licensed exchanges of digital financial assets or through the existing trading platforms that have stock exchange licenses. The bill also stated that individuals who have not been registered as qualified investors will only be able to invest 50,000 rubles ($900) in ICOs.

If passed, the new law will require private individuals to open special accounts and wallets with operators—similar to brokerage accounts—before they can use their cryptocurrency holdings.

The new law is expected to be enforced on May 1, 2018. Subsidiary regulations will be developed with the help of the Central Bank of Russia and the Ministries of Financial and Economic Development.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.