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What you can and what you cannot in the new cryptocurrency law?

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State Duma of the Russian Federation has adopted the draft law “About financial digital assets” in the third and final reading on July 22, 2020.

Two concepts are spelled out in the new law:

  • Digital currencies are cryptocurrencies (such as Bitcoin and Ether).
  • Digital assets are securities placed over the blockchain. We are talking about tokens that are needed not for accumulation or calculation, but for the non-financial exchange of goods and services.

All blockchain platforms must be Russian. To be able to issue tokens, the platforms themselves, their operators and owners will have to register with the Central Bank. The central bank will be able to develop restrictions on tokens access so that they become available only to qualified investors.
Exchange platforms, where tokens can be exchanged, are also subject to mandatory registration.

Digital financial assets must have a document with the prescribed volumes of issue and the rights of their owners.

The law “About Financial Digital Assets” prohibits payment for goods and services with cryptocurrency. The restriction applies to Russian companies, divisions of foreign companies in Russia, as well as to Russian tax residents (those who spend more than 183 days a year in Russia). Also, the bill prohibits officials from owning cryptocurrency and digital assets issued on foreign sites.

Cryptocurrency can be bought on foreign platforms, while it must be declared as property in the Russian tax authorities. At the same time, it is not yet clear how to do this correctly.

It is planned that the document “About financial digital assets” will come into force on January 1, 2021.

However, this law only introduces the concept of digital currencies and clarifies some of the terms associated with them. It is also stated here that another law will regulate the issue and circulation of cryptocurrencies. Perhaps it will be adopted in the autumn session. Additional laws may spell out administrative and criminal liability for operations with cryptocurrencies.

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