On Friday, Russia’s Ministry of Finance submitted a finalised bill on cryptocurrency regulation in Russia.
According to Kommersant, the “On Digital Currency” bill contains a detailed regulatory framework on the circulation of cryptocurrencies and, for the first time, “touches upon mining in detail.”
Aside from establishing the legal framework for the circulation and issuance of cryptocurrencies, the draft bill also establishes certification, identification, and accounting requirements for entities wishing to open digital asset businesses in Russia.
Notably, the draft law states that digital currency can be accepted “as a means of payment that is not the Russian Federation’s monetary unit.” This implies crypto can be considered a legal investment vehicle.
The law specifies the requirements for companies that want to engage in digital asset trading. To be granted an operating licence, an exchange operator, for example, must have a minimum working capital of 30 million rubles ($36 million). An operator of a digital trading platform, on the other hand, who wishes to engage in the business of virtual currency circulation must have at least 100 million rubles ($120 million).
The bill, nonetheless, will impose stringent rules on the two operators, including the preparation of annual reports, requirements for management bodies, internal audit, and control, as well as the establishment of a separate structural unit. Various crypto enthusiasts have deemed some of the current rules inconvenient and overly burdensome for digital asset operators.
Rules such as the requirement to retain registers of digital currency owners and the mandatory certification of electronic wallets, according to Blockchain lawyer Mikhail Uspensky, are “extremely overstated” and may discourage digital asset providers from setting up shop.
The bill was introduced on Friday, just days after the government submitted a draft law to the state duma to levy a tax on digital asset transactions. If the document is adopted, the income tax for Russian organisations owning digital assets will be 13%, while foreign companies will pay 15%.
Nonetheless, despite Russia’s central bank’s tough stance on cryptocurrencies, the tides appear to be shifting under Putin’s administration, particularly in light of Russia’s ongoing sanctions for invading Ukraine. Accelerating crypto regulations is thus seen as a step in the right direction for a country that controls the world’s third-largest bitcoin mining hash rate.
