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Russia and the new regulation of cryptocurrencies


Yesterday in Russia, The State Duma approved the country's new cryptocurrency regulation.

This is reported by the local newspaper Regnum, which also notes that the new law will take effect on January 1, 2021 and it will allow cryptocurrency transactions, which, however, will not be considered as means of payment.

In fact, the law speaks more generally about digital currencies, excluding whether they are international currency units or foreign currencies, and this implies that they should not be accepted to pay for goods and services.

Furthermore, this regulation defines digital financial assets by establishing the requirements for the computer system with which they are issued, as well as for the operators of these systems and those of the exchanges.

Regnum assumes that operational regulation of cryptocurrencies will be better specified by a second law which could be approved in the fall session.

In other words, the law approved yesterday establishes the definitions of digital assets, without going into details about what criteria should be used or administered in the country, and refers to a second regulation in which the most technical and concrete aspects are likely to be managed.

However, the judgment on this new regulation is still unclear. Firstly, because the definitions alone are not sufficient to clearly understand what approach Parliament has decided to impose on the country regarding the use of cryptocurrencies. Also, because it will be the future law that will specifically establish what can or cannot be done.

Another local newspaper, rbc.ru, reports that digital currencies with this law are defined as an electronic data set They are offered and / or can be accepted as a means of payment, but they are not monetary units of the Russian Federation, a foreign State or international currencies, so there is no person obligated to accept them.

It also points out that with this law, cryptocurrencies in Russia can be bought, sold, mined and exchanged, but it is not possible to use them to pay for goods and services to Russian residents.

This is a difficult passage to interpret. In fact, it is quite inconceivable that cryptocurrencies cannot be used as a means of payment, since a large part of them are, in fact, for all intents and purposes.

Various changes for this crypto regulation

This law had a somewhat turbulent origin, with several changes before its approval. It has been in process since 2018, and has been sweetened over the months.

It almost seems like the initial political will was to use an iron fist, but then this approach gave way to somewhat more pragmatic realism. There could also be a good dose of propaganda behind the numerous announcements made in the past that boasted of a strong focus on cryptocurrencies, which later turned out to be just propaganda announcements that were not followed by vigorous action.

Therefore, the end result could be a compromise between the supposedly strong initial approach and the pragmatic realism of those who cannot deny that Russian citizens are already using these new financial instruments, leading to confusion in the way they have been used. defined cryptocurrencies.

In summary, the definition contained in the law that has just been approved may not be the result of an objective analysis of how these technologies work, but of a negotiation that has been limited to finding a compromise between the most extreme and the most realistic positions.

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