Russian President Vladimir Putin has officially signed a bill banning the use of digital assets for payment in the country.
It means Russians cannot use digital assets as payment “for transferred goods, performed works, rendered services.”
The law gives exchange operators the power not to process transactions that use digital financial assets (DFAs) for payments.
DFAs include all digital assets, including cryptocurrency. The law also bans payments with utilitarian digital rights (UDR).
The chairman of the Financial Market Committee, Anatoly Aksakov, in the State Duma, the Russian parliament’s lower chamber, proposed the law on June 7, and the parliament approved it on July 8.
Before now, the country had no law banning digital assets for payments. But it has banned “monetary surrogates” and considers the Ruble the only legal tender in the country.
The law will become effective 10 days after publication in the government official gazette.
However, the bill does not ban digital assets, which means there are other possible applications, including payments in international trade.
Russia is currently facing significant economic sanctions due to the war in Ukraine. Some government officials support the proposal to allow crypto payments for trade with partners.
Russia sends mixed crypto signals
Meanwhile, the country is yet to regulate cryptocurrency. In 2021, it enacted a law, “On Digital Financial Assets,” introducing two legal terms – DFA and UDR.
Officials have explained that DFA refers to cryptocurrency, and UDR covers all other kinds of tokens.
Additionally, lawmakers in the country will consider a new bill on digital currency later this year. The law is expected to provide more regulatory clarity.
Despite all the regulatory gaps, crypto remains a major topic in Russia. World powers, including the U.S., believe the country is circumventing sanctions with crypto.
But experts said that the chances of this happening are very low due to the public nature of the blockchain and the size of Russia’s economy.
On its part, Russian authorities are starting to see the potential in cryptocurrency and digital assets after initially considering a blanket ban on the assets.
In Jan, Putin expressed support for Bitcoin mining, saying that the country has advantages such as surplus electricity and well-trained personnel.
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