Russian lawmakers have introduced a new law defining cryptocurrency and smart contracts, as part of ongoing efforts to tighten the rules around cryptocurrency.
According to reports in local media, the new laws specify the appropriate legal treatment for digital assets and smart contracts, and introduces the concept of “digital rights” into Russian law for the first time.
The bill means that digital rights will be treated in the same way as securities or other contractual rights. It clarifies that digital rights will be governed under civil law.
Automatically executing smart contracts will be treated in the same way as automated payment used by mainstream banks, while requiring information attached to each transaction, such as the identity of the digital rights owner and other parties to the transaction.
The Russian legal system is not based on common law, meaning there are no precedents—only laws written to the country’s civil code are enforceable. This means the bill will effectively be introducing regulatory structure to cryptocurrency and digital assets for the first time.
Russia has historically been reluctant to embrace cryptocurrency, and to date, the sector has been largely unregulated in Russia.
Ongoing efforts to develop legislation have stalled time after time, with lawmakers apparently struggling to create sufficient structures for regulating the fast-moving crypto space.
The new laws have been seen as one of the first tentative steps from the Russian authorities towards regulating crypto, at a time of an increasing international push towards establishing regulatory regimes for digital assets.
The Russian government had previously suggested it might ban cryptocurrency outright, and lawmakers have been reticent to embrace the technology fully for fear over its applications in criminality and its impact on the wider financial system.
Those suggestions have since been retracted, and the Russian authorities have appeared to warm to the idea of regulating the sector. As of November 2016, the Federal Tax Service of Russia said that cryptocurrency was “not illegal.”
The news will be welcomed by those operating in and around the Russian crypto sector, many of whom have called for greater clarity on the law around cryptocurrency and smart contracts in the country.
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