Russia May be Legalizing Crypto Payments as of May, 2018

Russia May be Legalizing Crypto Payments as of May, 2018

March 27, 2018 by Ramaa Mohan

The Russian Government is working with a draft law to protect cryptocurrency owners and their rights. The bill aims to regulate their use as a payment, subject the currencies to taxations laws, bringing it under inheritance rights and allowing bankruptcy claims.

The New Bill

The bill is co-sponsored by the Speaker of the State Duma, Vyacheslav Volodin, and the head of parliamentary Legislation Committee, Pavel Krasheninnikov. The bill is essentially an amendment to the Russian Civil Code to create a legal basis to regulate the use of digital currencies as a form of payment.

The Russian Finance Minister is responsible for the drafting of the bill and was filed about a week ago. In its newest version, the law regulates initial coin offerings and crypto mining but stays the ban on cryptocurrencies based on its critics. Which means that the fate of coins like Bitcoin and Ethereum lies in the hands of the Central Bank of Russia, officials of whom have repeatedly expressed their dislike towards the circulation and trading of cryptocurrencies in the past.

In the new bill, cryptocurrencies are termed as ‘digital currencies’ and contains a lot of definitions so that they are not misunderstood and to facilitate effective regulations that protect crypto owners. The bill chalks out the Russian government’s acceptance of cryptocurrencies as payment, deposits and transfers, however, it provides for the use of crypto as a means of payment only as and when it is technically possible.

Applicable from May

Smart contracts are to be given equal importance along with written and signed contracts, according to the bill. The bill forms a legal basis for the Russian government to regulate the use and also provides the government with a way to prevent money laundering. And if the government chooses to adopt the bill, it is expected to be in effect as early as the 1st of May.

All eyes are on the Russian Government as all agencies, like the Finance Ministry and CBR, have expressed conflicting opinions on the trade and circulation of cryptocurrency. And the dismissal or enactment of this bill will be the end of Russia’s hot and cold approach to the cryptocurrency market as it will be clear where the country stands.

The market is in tender hooks in Russia because the enactment of this bill will come as a huge win for it. However, the dismissal of the bill can also have quite a few ramifications. But only time will tell which way Russia will swing this time.

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