Russia's President Vladimir Putin has signed a new law that will ban the use of cryptocurrencies as a means of payment in the country by 2021. Meanwhile, the Russian government recently implemented blockchain technology for its constitutional amendment.
According to a report from the local environment ESTUARY On Friday (July 31, 2020), the bill signed by President Putin will prevent citizens from using cryptocurrencies to pay for goods and services in Russia. However, the invoice will allow transactions through digital financial assets (DFA).
Also, government officials and others who are prohibited from having accounts abroad cannot hold cryptocurrencies.
Speaking about the new bill, Anatoly Aksakov, head of the State Duma Committee on the Financial Market, commented that the Russian government defined cryptocurrencies as a means of saving, paying and investing. This law effectively protects the primacy of debris as the only legal tender in Russia.
Although the new law has been approved by the government, a part of the article states that:
"Russian natural and legal persons will be able to challenge digital currency transactions in court only if they have declared these transactions and the possession of cryptocurrencies in Russia."
According to informed In May, Russian lawmakers proposed a bill that would make cryptocurrency issuance and trading illegal. The proposal also sought to slap criminals with a fine of up to two million rubles and prison time. Not long afterward, there were reports that the State Duma was reportedly seeking to remove the criminal implications of the proposed bill.
The Bank of Russia will monitor digital asset transactions
While the new bill will see a ban on the use of cryptocurrencies as a means of payment, it allows companies to issue DFAs after Bank of Russia approval. Russian commercial banks and other companies may also operate DFAs under the jurisdiction of the country's central bank.
These tokenized securities are exchangeable for other assets with all those transactions monitored and approved by the central bank. The Bank of Russia will develop modalities for evaluating these DFAs to determine if they are suitable for investment. However, as with cryptocurrencies, DFAs cannot serve as means of payment.
While the Russian government does not appear to adopt cryptocurrencies, the attitude towards blockchain technology is different. The government used blockchain for its constitutional amendment, which will decide whether Putin gets a third term.