Putin Signs Bill Prohibiting the Use of Digital Assets as Payment in Russia
President Vladimir Putin of Russia has signed
a bill banning payments with digital financial assets. The legislation mandates
crypto exchanges not to process transactions involving the use of DFAs, the
legal category presently covering cryptocurrencies.
Legislation Banning Digital Asset Payments in the Russian Federation
Russian President Vladimir Putin has signed a
law imposing direct restrictions on the use of digital financial assets (DFAs)
as a means of payment in Russia, the crypto page of the RBC business news
portal has reported. The ban also applies to utilitarian digital rights (UDRs)
too.
The law "On Digital Financial
Assets," which has been effective since January 2021, introduced two legal
terms. Russian officials have explained that DFA encompasses cryptocurrencies
while UDR applies to various tokens. This fall, Russian lawmakers are likely to review a
new bill "On Digital Currency" that has been introduced to fill the
regulatory gaps.
The legislation that was approved by
the Head of State of Russia was filed with the State Duma, the Lower House of
the Russian Parliament, on June 7 by the Chairman of the Financial Market
Committee, Anatoly Aksakov. The legislation was adopted a month later.
Officially, Russian law does not explicitly prohibit payments with digital
assets, although "monetary surrogates" are banned and the status of
the ruble as the only legal tender is enshrined.
While the bill forbids the exchange of DFAs
"for transferred goods, performed work, or rendered services," it
does allow for DFA payments under other federal laws. Amid expanding financial
restrictions imposed as part of Western sanctions over the invasion of
Ukraine, a proposal to approve small-scale crypto payments in foreign
trade with Russia’s partners has been gaining support in Moscow.
Along with banning direct payments with
digital financial assets, the law also mandates crypto exchange platforms
offering exchange services to reject any transactions that can potentially lead
to the use of DFAs to substitute the Russian ruble as a payment instrument.
The new legislation will be in force ten days after the notification in the Government Gazette of Russia. However, on exemptions, the RBC report notes that Russian legal experts have already highlighted the controversies in the document.
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