Russia has finally updated its crypto law to a much more flexible one compared to previous drafts. However, it basically prohibits the use of Bitcoin as a means of payment. Is Bitcoin useless in the territory?
Having come a long way, Russia has passed a bill that legally recognizes cryptocurrencies like Bitcoin, but prohibits their use to buy goods or services.
Legal but useless Bitcoin in Russia
On July 22, the local news agency Regnum reported that the State Duma, Russia’s legislative body, passed a bill entitled “On Digital Financial Assets” (DFA) in its third and last reading on July 21.
This new bill recognizes the digital currency “as an electronic data set that can be accepted as means of payment”And grants you legal status.
In this sense, as of January 1, 2021, all operations related to cryptocurrencies will be legalized. However, not everything could be so wonderful.
Despite the fact that Russia granted cryptocurrencies legal status, Bitcoin and the rest will not be able to be used as a means of payment. This undoubtedly represents a hard blow since they are designed for it.
But, then, the question is: If I cannot use Bitcoin and the rest of the cryptocurrencies as a means of payment, what can they be used for?
Well the DFA bill states that cryptocurrencies “They can be issued, bought, sold and registered under special information systems.”
In this line of thought, “The systems and their operators must comply with Russian laws and will remain on file in a relevant register maintained by the Bank of Russia”the statement said.
In addition, we should also note that the current law does not contain the definition of “token” and “mining”. However, it does offer a definition of digital currency.
Also, while this bill provides a basis for cryptocurrency legislation in Russia, regulation of the industry will be part of a completely different bill.
Anatoly Aksakov pointed out to RIA Novosti that more detailed regulations could be passed during the next parliamentary session in the fall.
Why is it more flexible?
We previously noted that, despite prohibiting the use of Bitcoin and other crypto as a payment method, it turns out to be a much more flexible bill than anticipated.
The reason is that, previously, the country’s legislators introduced a version of the law basically completely outlawed crypto in the country.
In this sense, any company that emits or commercializes crypto using infrastructure based in Russia would be illegal.
Also, it was raised to impose fines of up to $ 7,000 or seven years in prison for people who buy Bitcoin with cash.
Obviously, said bill generated discontent within the crypto community in Russia. Even protests were generated in the country and criticism from various government branches.