Russia changed its draft bill regulating crypto and digital assets. You won’t go to jail for facilitating crypto deals in the country – at least, not just yet.
Previously, the country’s lawmakers introduced a version of the law that would make any business issuing or trading crypto using Russia-based infrastructure illegal, provoking an outcry from the crypto community and criticism from several government branches.
The new draft is more neutral. It suggests crypto is a kind of property that cannot be accepted as a means of payment. Any lawsuits related to the ownership of crypto can only be considered by the courts if plaintiffs report their crypto holdings and deals for tax purposes.
This might change the currently inconsistent practice in the Russian courts, where there is no universal definition of cryptocurrency.
A digital currency, according to the bill, is a digital set of data that can be used as a payment method or investment tool and has no central party responsible for it, “except for the operator and (or) the nodes of such systems, which are only responsible for maintaining the issuance of the digital data and upending such a system.”
The issuance and flow of crypto in Russia should be regulated by other laws, the bills says. The bill’s sponsor, Anatoly Aksakov, told Russian news agency RIA Novosti more detailed regulations might be passed during the next parliamentary session in the fall.
The bill passed the second hearing today, which is the most important one in the Russian lawmaking process. There are three rounds of hearings for any bill to pass, but after the second one, the text of a bill is considered final. The document, which was initially only dedicated to regulating digital securities, ultimately merely included a mention of digital currency and its basic definition.
The main part of the bill, however, outlines the regulations for assets like digital shares of a company, whether on a distributed ledger or in “another kind of system.” The issuers of such assets should register with the Bank of Russia, and have managers with experience in finance. The issuer of such a system should control it in a centralized way and should be able to amend the ledger in case a court rules so.
The law is supposed to come into force in January 2021. It won’t change much for the cryptocurrency industry in Russia, says lawyer Mikhail Uspensky.
“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,” Uspensky said.
He added that the current version of the bill is a compromise between the conservatively inclined Bank of Russia, other government bodies and the crypto 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 [over-the-counter] businesses, and so on,” he said.