Russia moves forward on Crypto Bill formed under tight Kremlin remit

 The Russian government has moved forward on proposals to introduce a new bill on cryptocurrencies, which aims to provide a legal framework for users and businesses operating in cryptocurrency disciplines.

A ‘Cryptocurrency Bill’ legislative draft framework is reported to have been signed-off by President Vladimir Putin last week, authorised on stringent Kremlin provisos.

Russian lawmakers have been instructed to develop a coherent framework with regards to regulating, monitoring and validating transactions related to ‘digital financial assets’.  

Putin’s cautious approval marks a change in the Russian government’s stance on regulating cryptocurrencies, in which observers thought that the Kremlin would instruct the Duma to sanction an outright ban on crypto exchanges, transactions and uses of digital currencies by national citizens.

Instead, the Kremlin has given supporting ministers a six-month window, in which to provide further measures, clarity and safeguards to support the passage of Russia’s cryptocurrency bill, if the mandate is to be approved as part of the Kremlin’s 2021 legislative agenda, requiring presidential sign-off by the end of January.

It is reported that the Kremlin requires further transparency on the definition of cryptocurrencies, which the draft framework describes as ‘an aggregate of electronic data capable of being accepted as the payment means’.

Despite receiving a ‘legal status’, the Kremlin underlines that cryptocurrencies can hold no value as a monetary unit within the Russian Federation. As a result, cryptocurrencies cannot be used for the payment of goods and services.

At a business-level, the Kremlin states that all crypto exchanges servicing Russian consumers will have to register their details with the central bank.

Crypto business observers have welcomed the Russian government’s change of stance, noting the Russian market’s huge potential.

However, caution is detailed with regards to how the Kremlin will draft and implement key legislation attached to cryptocurrency mining, design, and storage provisions, in addition to which cryptocurrencies the Russian government will allow its citizens to exchange.