The Ministry of Finance in Russia has successfully drafted a legal bill proposing the general digital assets and crypto regulation, contradicting a previous call from the country’s Central Bank (CBR) to ban them.
On February 21, the Russian Finance Ministry introduced a draft bill of the federal law dubbed “On Digital Currency,” advocating regulation for digital assets rather than entirely banning them. The proposed bill now proceeds to the parliament for further consideration.
The Ministry cited the formation of a legal marketplace for digital currencies alongside other determining rules for their circulation and range of participants as the rationale for the initiative. However, the bill does not endorse digital assets as legal tender, but it authors cryptocurrencies as an investment vehicle.
The crypto bill proposes a licensing framework that would authenticate platforms facilitating the circulation of digital assets and collectively stipulates prudential, risk management, data privacy, and reporting requirement for each operator. The bill also suggested that the buying and selling of digital assets should happen via a bank account, advocating both crypto platforms and banks to adhere to Know Your Client (KYC) procedures.
The legislation also requires digital assets operators to inform retail customers of risks associated with crypto trading. In this case, the agency proposes the regulatory authority to invigilate a passed test for all retail investor to assess their knowledge of crypto investment practices and risk awareness.
All successful individuals will be allowed to conduct a yearly investment limit of 600,000 rubles ($7,900), with those failing subjected to an annual limit of 50,000 rubles ($650). Interestingly, the recent bill exempts institutional investors and large businesses from the yearly investments limit.
Buy Bitcoin NowRussia Still Undecided On Crypto Regulation
The proposed crypto bill has introduced a formal definition of crypto mining and an elaborate mechanism whereby crypto market participants can report their activities to tax authorities.
The new crypto bill appears a few days after the Central Bank of Russia (CBR) forwarded its digital assets legal framework to the Ministry of Finance for review. CBR proposed that issuing, facilitation, and circulation of digital assets should be deemed illegal. Its latest proposal also outlawed crypto ads.
The Ministry of Finance and the Central Bank were expected to settle their stance on digital assets on Friday last week, with the two producing contradictory pieces of legislation instead. While commenting on their negotiations, in a recent press release, the Finance Ministry said:
“CBR’s propositions will be considered on later stages of the bill’s development insofar as they are not at odds with the Finance Ministry’s approach.”
