Russia requires officials to declare digital currency holdings from 2021

Getting your Trinity Audio player ready...

Russian government officials will now have to include their digital currency holdings when they report their annual income. The new stipulation comes two months before the country implements the newly adopted law giving digital assets legal status.

Russia’s prosecutor general Igor Krasnov announced the new directive recently after attending the 18th meeting of the prosecutors general of the Shanghai Cooperation Organization (SCO) member states. The SCO is a Eurasian political and economic alliance formed by China, Russia and four other Asian states in 2002. It has grown to eight member countries and 10 observer states.

The directive requiring public officials to declare their digital currency holdings is aimed at helping the Russian government fight corruption, Krasnov revealed. While Russia strictly prohibits the use of digital currencies as payment, the new directive suggests that the government believes they are being widely used by public officials, enough to warrant their reporting.

The new directive indicates a change of stance by the Russian government on digital currency reporting. In January 2018, the prosecutor general together with the Labor Ministry announced that public officials were not required to declare their digital currencies.

“At present, approaches to the definition and regulation of cryptocurrency in the Russian Federation at the legislative level are not defined,” the Ministry stated at the time. The officials were however required to disclose if they earned “traditional money” by selling digital currencies.

The decision to exclude digital currencies from income reporting sparked concerns that they would become the new tool for bribery. This concern has now been addressed by the Russian government in its new directive.

Russia has continued to fight corruption spiritedly, the prosecutor general stated. In the past three years, the government has seized over $440 million worth of undisclosed assets from public officials.

While issuing the new directive, Krasnov stated that Russia has taken great strides in digital currency oversight. The biggest of these is ‘The Bill on Digital Financial Assets’ that the State Duma passed this year. The bill will come into effect in January next year, finally giving digital currencies a legal status in Russia. However, the government still prohibits their use as a payment method.

In 2020, the Russian government has aggressively censored digital currency-related websites. The latest to face the ban is LocalBitcoins, with the P2P trading platform blocked just a week ago.

See also: CoinGeek Live panel on Digital Assets Investments: Real Utility, Real Value.