The most recent version of a proposed crypto bill in Russia indicates that the government is on the verge of legalizing cryptocurrency. However, other features of the measure, particularly its treatment of cryptocurrency as legal cash, raised some concerns.
The bill’s approach to using cryptocurrency as legal cash represents a significant move. The plan stated in its initial draft, presented in February, that cryptocurrency would not be considered legal cash. With some limitations, the Finance Ministry appears to have softened its attitude.
Russia will recognize several cryptocurrencies as legal money
The new draft recommends that digital currency be accepted as a “method of payment that is not the monetary unit of the Russian Federation,” according to a report by local news agency Kommersant.
However, the country will only accept decentralized tokens. This means that stablecoins backed by the US dollar, such as Tether (UST), will most likely be rejected as payment.
According to Kommersant, the government has yet to decide which cryptocurrencies would be accepted as legal money.
Other features of the bill haven’t changed since it was first written. It lays forth stringent licensing procedures for cryptocurrency exchanges and limits the amount of cryptocurrency that ordinary residents can trade.
The country will also create a database of all entities trading cryptocurrency within its boundaries, including people and exchanges.
The mining of cryptocurrencies is a primary focus.
The bill also seeks to create a registration of crypto mining enterprises in the country, similar to how it intends to do with trading. The bill will move mining out of the legal limbo and under government control, making it taxable.
Given Russia’s immense potential to become a mining centre, some Russian ministers have called for the space to be legalized. The two major draws are cheap electricity and a frigid climate.
However, with Western countries imposing crypto sanctions on Russia, it was unclear how the country would promote offshore crypto trading. Ksenia Yudaeva, a member of the Russian central bank, reportedly stated that the bank saw limited opportunities for using crypto to circumvent sanctions.
Russia’s foray into crypto comes in the aftermath of some of the world’s toughest economic sanctions, which have stifled the country’s economic growth.
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