Russian Lawmakers Pass Bill to Treat Cryptocurrency As Property, But Bans Them for Payment of Goods and Services

On Wednesday, July 22, Russian lawmakers passed a bill that gives legal status to cryptocurrencies like Bitcoin. After its third and final hearing, the legislators approved the the Digital Financial Assets (DFA) bill.

The bill also received major backing from Anatoly Aksakov, a senior lawmaker who currently heads Russian parliament’s financial markets committee.

Citing the actual report, local news publication Tass reported that the law recognizes digital assets “as an aggregate of electronic data capable of being accepted as the payment means… [but] cannot be used at the same time to pay for any goods and services”.

The new law gives Russian a legal approval to buy and hold Bitcoin and other cryptocurrencies for investment purpose. However, the law comes with a caveat that “Possession of digital currency, its acquisition and transfer by legal means are allowed only if declared”.

It further adds that digital currencies “can be issued, purchased and sold and registered within the framework of special information systems” and “systems and their operators shall conform to Russian laws and stand filed in a relevant register kept by the Bank of Russia.”

It means that the Russian central bank has an important role to play in the regulation of digital currencies. “The central bank will have the right to determine features of digital assets accessible by qualified investors only,” reported Tass.

Another limitation with the new crypto law is that Russians cannot use Digital currencies for making daily payments of goods and services. Thus, it clearly bans them from having an existence in Russia’s mainstream financial markets.

Russian lawmaker Mikhail Uspensky said that the law will come into force in January 2021. “The only thing outright prohibited is taking crypto as payment for goods and services, which was the Bank of Russia’s principal premise. But buying a cup of coffee for bitcoin is still a kind of exotic thing anyway,” he added.

He also noted that the current bill draft is a midway between the conservative central bank and the cryptocurrency community. “They decided only to mention cryptocurrency in the bill so far and prohibit using it as a payment, but postpone deciding on more important issues, like the criminal cases [related to crypto], crypto OTC businesses, and so on,” he said.