The Russian government and the central bank of the country have reached an agreement on the regulation of digital assets. This development is significant for the history of cryptocurrency.
According to a statement released on Tuesday, the Russian government and central bank have agreed to draft new legislation or amend existing laws in order to establish a framework that recognizes cryptocurrencies as a form of currency.
The goal of Russia is to integrate blockchain-based digital currencies into its financial system, while also supervising the use of cash by banks. This will help regulate the usage of cryptocurrencies and reduce the risk of bribery, among other things.
In order to use cryptocurrency as a form of currency, users will need to undergo proper identity verification through their country’s banking system or authorized intermediaries. However, transactions below R 600,000 ($8,016) will not need to be declared, according to the document.
Any transactions conducted outside of the legal parameters will be considered a crime, and fines will be imposed for the illegal marketing of cryptocurrencies.
The Russian government and the central bank, known as the Bank of Russia, have apparently agreed on how to regulate Bitcoin and other cryptocurrencies. They plan to recognize them as currency, but with certain limitations. This decision by the Bank of Russia represents a change of direction, as they had previously suggested a ban on crypto activity just a month ago due to potential financial risks.
According to a recent report by Russian news publication Kommersant, the government and the Bank of Russia have reached an agreement on cryptocurrency regulation. They are currently preparing a draft law, expected to be completed by February 18th, that will define cryptocurrencies as an “analog financial instrument.”
Maintaining financial stability is important not only for Russians but for all citizens. However, the Bank of Russia had previously advocated for a complete ban on cryptocurrencies in a report issued in January 2018. The industry poses a significant speculative risk to the future of the Russian economy and should be discouraged accordingly. The Bank of England also wants to prevent banks from facilitating cryptocurrency transactions.
It seems that transactions exceeding 600,000 Russian Roubles (Rs. 6 lakh) will be subject to government taxation. Accepting cryptocurrency as a means of payment illegally will also result in penalties.
Additionally, a supporting draft document is provided, which claims that the regulation will protect the rights of citizens. Under a licensing system for cryptocurrencies, providers will be required to have “financial airbags.”
“The complete absence of regulation in this industry, as well as the imposition of a ban, will lead to an increase in the shadow economy, more cases of fraud, and destabilization of the industry as a whole,” states the document.
