Russia is Drafting the Legislation to Recognize Crypto as Traditional Currencies

Reportedly, an agreement on a prospective cryptocurrency-trading system has been reached among the government and the Bank of Russia.

Russian officials are creating thorough regulations on the circulation of cryptocurrencies, per the Russian newspaper Kommersant. Instead of merely being supported as digital financial assets, cryptocurrencies will be recognized by the Russian government as equivalent to traditional currencies.

Russia’s policy on cryptocurrencies is rapidly evolving. Digital assets will be treated as currencies rather than digital financial assets under the new regulations. The Russian government can offer explicit restrictions for businesses and persons engaging in cryptocurrency-related actions by regulating cryptocurrencies in a similar manner as other currencies.

The circulation of crypto assets will be available solely with complete authentication and through the Russian financial system or approved facilitators once the new regulation enters into force. Furthermore, transactions for more than 600,000 rubles, equivalent to $8,030 must always be reported, with unreported transactions over this sum being a crime.

The Bank of Russia had earlier expressed reservations about the entry of cryptocurrencies into the economy of Russia taking it so far as to call for an official ban just 3 weeks ago. From then on, the President of Russia Vladimir Putin has indicated openly that the country does have a competitive edge in mining cryptocurrencies, implying that rather than ban it entirely, he prefers to expand the cryptocurrency industry. 

In addition, Russia’s Ministry of Finance suggested new legislation to legitimize cryptocurrencies at the beginning of February. Banks could be allowed to offer cryptocurrency exchange solutions to both individuals and enterprises, according to the ministry.

Considering Wednesday’s news, it looks that Putin and crypto-advocate Russian government officials have prevailed, paving the way for a packed legislative structure in the weeks ahead. The new legislation acknowledging crypto assets like currencies, as per Kommersant, should enter into force after June 2022 or at the beginning of next year.