A new bill is being worked on within the Russian government that would have cryptocurrency trading and mining banned entirely unless a person enters a list of approved individuals.
“We aim to minimize the existing risks of using digital objects for transferring assets into an unregulated digital environment for legislation of criminal incomes, bankruptcy fraud or for sponsoring terrorist groups,” said Pavel Krasheninnikov, the Duma member spearheading the movement.
According to others inside the movement, the lack of regulation in the cryptocurrency and token market leaves participants unprotected, making them vulnerable to scams.
The bill also says that digital currencies are not a legal means of payment, but they can be used as such “in controlled quantities.” Conditions for selection criteria for cryptocurrency processing approval will be determined by a separate law made in conjunction with the Russian central bank, the Finance Ministry, and the Ministry of Economic Development.
Krasheninnikov added that the State Duma Committee has already made its intentions clear and is backing the bill, meaning that it won’t experience many hurdles on the way to becoming law.
Yelena Tsaturyan, legal counsel for the KSC Group of Companies, said that this law should be viewed in a positive light. She pointed out that in Japan, cryptocurrencies have legal status as a payment method and the European Union approves their use for taxes.
“There is a contradictory situation in which Bitcoin is not officially recognized by the state, but incomes from operations with digital currency are subject to taxation,” she added.
Just half a year ago, Nikolai Nikiforov, the Russian communications minister, asserted that cryptocurrencies would never be legally recognized by the country, and has argued that Russia is wary of the fact that Bitcoin is a foreign project. However, the developments in the Duma show that other opinions carry weight in Russia as well. If the law passes, we may see Russia build upon this framework and treat exchanges and trading platforms much like banks.