Russia’s Crypto Bill Gets Surprise Revision

Russian lawmakers have excluded such basic terms as “cryptocurrency” and “mining” from the bill on digital financial assets.

Russia’s draft law on digital financial assets has been edited again in a rather unexpected way just before a second hearing scheduled for the autumn session of the State Duma, the lower chamber of Russia’s Parliament. The lawmakers have decided to remove the definition of crypto mining from the text containing proposals for regulating crypto assets in the country.

Anatoly Aksakov, chairman of the Duma committee on financial markets, explained the reasons behind this decision in an interview for Interfax, telling the Russian news agency on the sidelines of the Finopolis 2018 conference:

“Earlier, we had been considering the matter of Bitcoins and their possible integration into our economic system. But since we came to the conclusion that we don’t need these incomprehensible Bitcoins, consequently, we don’t need mining as well.”

With a definition of crypto mining absent, the new law will not address the issue of taxing crypto miners though industry participants have been waiting for that development to become the first demonstration of the stance taken by Russian authorities on the matter.                 

As Aksakov put it, this question should be submitted for consideration to tax authorities since within the regulatory framework proposed by the bill, the concept of crypto mining is absolutely “meaningless.” He added that defining “mining” would also demand defining “cryptocurrency” although there is no reason to do it since Russia does not need Bitcoins and is not interested in regulating the processes of their creation.

Interestingly, Aksakov told local news agencies at the start of this month that crypto mining should be defined by the law and taxed as a type of business. The lawmaker explained then that people earn big money from mining and must pay taxes although he proposed a two-year grace period for miners.

It remains unclear if the definitions for tokens and initial coin offerings (ICOs) are still included in the current version of the draft law.

The digital assets bill was first submitted to the Duma by the Russian finance ministry back in January. In March, a group of lawmakers led by Aksakov introduced its modified version. Approval was initially expected by the summer, but the procedure was delayed because MPs felt they needed more time to consider it. The second of three hearings in the Duma is set to take place before the end of October. To become law, the bill also has to go through the Federation Council, parliament’s upper chamber, and get signed by the president.

Meanwhile, digital currencies, mining, and ICOs remain without legal status in Russia.

Reading now