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Russia Will Not Legalize Crypto Payments

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A draft bill intended to protects the rights of cryptocurrency owners while also regulating according to Russian laws was presented to parliament in March with high hopes of cryptocurrency payments becoming legalized. However, this may not happen at all.

Head of the State Construction Committee Pavel Krasheninnikov told Izvestia, that the bill aims to set a legal basis for digital rights and digital transactions. The bill is also seen as evidence that the State Duma (Russian parliament) regards cryptocurrencies as a promising technology that should be incorporated into the country’s legal agenda.

While the bill gives more rights and protection to cryptocurrency users, while regulators hope that these laws will remove risks of digital assets being used to place items in an unsupervised environment, by which criminal profits can be allowed.

While crypto payments will become legal under these changes, the bill suggests that later on cryptocurrencies could be used as payment “in controlled quantities.”

President Vladimir Putin instructed the Russian Central bank and the government to deliver an evaluation on cryptocurrencies, as well as all the risks involved and if it is necessary to implement new technological banking solutions. He also set a deadline on July 1 for the adoption of appropriate cryptocurrency legislation in the country.

The bill deliberates digital validation of an anonymous user as his written consent, functioning as a way of signing a “smart contract.” A transaction’s execution is finalized after signing and can only be contested if there is a third party involved in the computer program’s process.

The bill also makes legal the processing and collecting of large amounts of data.

The State Duma’s legal department has been instructed to use the notions such as “cryptocurrency” and “token” rather than “digital money” and “digital law,” considering the terms that are applied in practice.

The bill does not deal with all of the president’s orders, but it offers settings for further regulation of the digital currency industry, said Igor Sudets, director of the “Blockade for Lawyers” educational program at Plekhanov Russian Economic University.

Because cryptocurrencies and tokens currently have no legal status, they can be used for bribes, withdrawing funds from bankruptcy, and paying “black” salaries, Sudets said.

If Russia does not manage to legalize cryptocurrency in one form or another, it will miss out on many monetary advantages and the opportunity to solve some important financial issues in its country.

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