Russia Mulling the Reversal of Its Crypto Payments Ban, Will Allow Under Some Contracts

Just at the time when Chinese authorities are going all-guns-blazing and introducing the crypto ban, Russia is reconsidering the option to reverse its crypto ban. Pavel Krasheninnikov, chairman of the Russian Duma’s Committee on State Building and Legislation, said that the Russian government might permit crypto payments once again a “contractual medium” by amending the civil code.

While speaking at the St. Petersburg Legal Forum, Pavel said: “We believe that it is necessary to make amendments to the Civil Code. Now we are in the appropriate approval procedure but there is an understanding that digital monetary units, as they have been called, can be a contractual means of payment”. 

As reported by local publication Interfax, the lawmaker noted that cryptocurrencies like Bitcoin (BTC) do not represent a legal payment method in Russia. Thus, merchants aren’t allowed to accept it as a legal payment.

Since the planned amendment involves allowing crypto payment under the Russian contractual law, it would only be possible with the consent of all parties involved.

Earlier this year in January, Russia introduced the Law “On Digital Financial Assets and Digital Currencies,” that aims at regulating crypto payments and transactions in the country. The ruble is the only legal tender as of now in the Russian Federation. Later in February, Russia introduced another bill while confirming the property status for cryptocurrencies.

Last year, Anatoly Aksakov, chairman of the Russian State Duma Committee on Financial Markets noted that allowing crypto payments in the country could be harmful for the country’s financial system.

Just like other countries, Russia too is working on its central bank digital currency (CBDC) aka the Digital Ruble. Aksakov said that this will be the highest form of money and shall be an integral part of Russia’s national settlements by 2023-2024.

By the end of 2021 this year, Russia’s central bank - Bank of Russia - will finalize the Digital ruble prototype. Back in March 2021, Askakov admitted that the larger plan with the Digital Ruble is to move away from the U.S. Dollar for payment settlements.