Russia’s Bill on Banning Crypto As A Payment Method Passes First Parliament Reading

A bill that would ban crypto as a payment method in Russia has passed the first reading in the parliament.

By Anna B Kiwanuka

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Investors have recently witnessed attempts by Russian politicians and officials to fully embrace and institutionalize cryptocurrency. However, last week, a bill to prohibit cryptocurrencies as a payment method was introduced by Russia‘s lower parliament chamber, raising questions about the position of the nation on cryptocurrencies.

The country has also been working to make cryptocurrency a taxable financial asset and a tool for international trade.

The bill that would impose a complete ban on payment using crypto has passed the first reading in Russia’s parliament which means that the dream of legalizing crypto as a payment method in Russia is slowly fading away.

Local Russian news sources broke the news. The bill, which was sponsored by the Financial Markets Committee head, passed the first reading with a reservation.

The bill received criticism for its stringent rules governing digital rights and tokenized assets. One of the main potential problems that was pointed out is that it treats Digital Financial Assets (DFAs) which are known as tokens rather than cryptocurrencies, as a payment method while they are most commonly used as security tokens.

By mandating DFA exchange managers to refuse any transactions involving the use of cryptocurrency as a method of payment, the new measure formalizes the ban.

The new measure also hits on the idea of an electronic platform. It alludes to the many platforms that deal with and issue digital assets. Additionally, the platforms would have to provide the national bank with their data. Legislation on digital financial activities already exists and went into effect in 2021. If the bill successfully moves forward, Russian investors can forget about using crypto as a payment method.

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