Russia Goes Bullish On Bitcoin As Finalized Bill Suggests Adopting Crypto As Legal Tender

On Friday, Russia’s ministry of finance submitted a finalized bill on the regulation of cryptocurrencies in Russia.

According to a report by Kommersant, the bill which is titled “On Digital Currency” contains a detailed regulatory framework on the circulation of cryptocurrencies and for the first time, “touches upon mining in detail,” opening up new opportunities for Bitcoin miners who currently fall in the regulatory grey zone.

Apart from providing the legal framework for the circulation and issuance of cryptocurrencies, the draft bill also introduces requirements for certification, identification, and accounting for entities who would like to open digital asset businesses in Russia.

Most notably, the draft law says that digital currency can be accepted “as a means of payment that is not the monetary unit of the Russian Federation”. The bill recognizes further cryptocurrencies as legally accepted investment vehicles.

The law outlines the requirements for firms that intend to carry out digital asset businesses. An exchange operator for instance must have a minimum working capital of at least 30 million rubles or $36 million to be granted a working license. On the other hand, an operator of a digital trading platform who wishes to engage in the business of circulation of virtual currency must have at least 100 million rubles or $120 million.

The bill however puts the two operators under stringent rules including the preparation of annual reports, requirements for management bodies, internal audit, and control as well as the creation of a separate structural unit. Some of the rules at hand have been seen as inconvenient and too detrimental to digital assets operators by various crypto enthusiasts.

According to Blockchain lawyer Mikhail Uspensky, rules such as the requirement to retain registers of owners of digital currencies and the mandatory certification of electronic wallets are “extremely overstated” and may discourage digital assets providers from setting up shop.

Friday’s bill comes even as the government submitted to the state duma a draft law that provides for a tax on digital assets transactions. If the document is adopted, for Russian organizations owning digital assets, the income tax will be 13% while for foreign companies will be 15%.

That said, despite Russia’s central bank’s tough stance on cryptocurrencies, tides seem to be shifting under Putin’s administration, especially with the ongoing sanctions against Russia for invading Ukraine. Fast-tracking crypto regulations are thus seen as a step in the fitting direction for a country that controls the third-largest bitcoin mining hash rate globally.