Despite Russia proposing its first cryptocurrency law back in January 2021, the country’s crypto market is still looking rather hazy and is associated with a lot of uncertainty due to a lack of regulation.
As of January 1 2021 cryptocurrencies were declared ‘allowed’ in Russia – but not to be used as an exchange for goods and services.
That means Russians can mine, trade and hold cryptocurrencies – but using them as a payment option is considered illegal.
However, the Prosecutor General’s Office of Russia recently proposed to define cryptocurrency as property in the country’s Criminal Code.
Policy makers in Russia are said to be working on a new law in order to ‘protect’ non-professional investors from rash investments in cryptocurrencies.
Anatoly Aksakov, the chairman of the Russian State Duma Committee, said that Russia needs new laws to adopt in order to protect retail investors from crypto-risks.
“Digital assets are the topic of our close attention, and here we will look at how to protect our citizens as much as possible when investing in digital currencies and digital assets, because here is a new tool, and it is quite difficult for an unqualified investor,” Aksakov said.
As for now, the crypto future in Russia looks pretty hazy. The government has spoken about creating Russia’s own regulated digital currency, yet holding undeclared cryptocurrency between $1,300 and $13,000 is finable and even can lead to imprisonment.
Russian President Vladimir Putin recently signalled tolerance of cryptocurrencies saying they “have the right to exist and can be used as a means of payment”.
Still, he warned it was too soon to talk about using digital currencies for trading oil and other commodities that form the bulk of Russia’s exports.
Recent reports showed that 77% of Russian investors believe that investing in crypto is the “most forward-looking” investment.
Prosecutor General wants crypto recognised as property under criminal law
The Prosecutor General’s Office of the Russian Federation Igor Krasnov also announced he prepared a draft law to recognise cryptocurrency and other virtual assets as property.
The legal definition will be used in court proceedings within the framework of the Criminal Code, Krasnov explained and expressed concerns over the rising usage of modern financial technologies to commit crimes.
Krasnov revealed that his department had already taken the initiative and drafted a bill that would regulate the matter, and said he hopes lawmakers would support it.
To date, cryptocurrencies remain only partially regulated in the Russian Federation, mainly through the law ‘On Digital Financial Assets‘ which went into force in January of this year.
While it introduced terms and rules pertaining to cryptocurrency and related activities like “digital currency issuance”, it didn’t deal with other areas such as crypto mining or payments, for example.
While the idea of recognising mining as a pure business has been gaining support among Moscow officials, the Bank of Russia is still opposing, allowing the free circulation of cryptocurrencies in the Russian economy.
The head of the monetary authority, Elvira Nabiullina, recently commented that the digital ruble, which is currently under development, is what Russian citizens actually need while again rejecting cryptocurrencies that, as she insisted, pose risks to financial stability.