As far as the cryptocurrency industry is concerned, Russia presents countless opportunities. The crypto scene has gained quite some popularity within Russia in recent years.
How Russia failed Crypto Enthusiasts
Regulations help establish a proper legal environment for cryptocurrency transactions to take place. Arguably, Russia could have been the hub of virtual assets if such regulations were put in place. Instead, the Russian government tried to ban cryptocurrencies multiple times.
Like usual, Russia decided to do things differently. Russia has consistently failed to implement such frameworks. In the eyes of crypto enthusiasts, this is a big challenge that they have to deal with.
It is unlikely that Russia will implement a proper legal framework any time soon. Recent developments seem to support this statement. News revealed that bills restricting the circulation of cryptocurrencies has been proposed. This decision will serve as a big blow to cryptocurrency fans around the country.
State media released some information on government plans related to cryptocurrencies. The state is planing to extend the Digital Financial Assets laws that are already in place. The new set of rules first appeared in July and will be implemented by early 2021.
The Russian government had the need to regulate transaction involving digital assets. That is how the DFA laws came about. The laws seem to target well established currencies like Bitcoin and Ethereum. At the time, the DFA laws were meant to be coupled with other legislation. The end result would be the full regulation of cryptocurrency circulation withing Russia.
At first it appeared as if the Russian government was planing a full on crypto ban. The latest legislation counters that theory. The latest proposals are aimed at placing large restrictions on the industry. Although a complete ban is possible, it is uncertain what the end result will be.
The latest set of laws target cryptocurrency transactions that do not follow the law. Transactions cannot be completed outside of Russian boundaries. This means that Russia is essentially targeting anonymous transactions.
Experts also observed another approach to cryptocurrency unique to Russia. The latest legislation changes the definition of cryptocurrency within Russia. The new set of laws characterizes crypto as property. This ads another layer of complexity to the matter.
The Russian Ministry also proposed another amendment for the federal law. This one seeks to prevent mining entities from receiving payments in the form of crypto. This legislation still allows room for cryptocurrency mining. The only difference is that miners will have to receive payments in the form of fiat currency.
Besides that, another proposal completely banning cryptocurrency has been presented. This is the worse case scenario for cryptocurrency enthusiasts within Russia. It is uncertain if this proposal will pass but if it does it spells trouble for the crypto community. This proposal would fine people up to 1,000,000 rubles for using cryptocurrency. In addition to the fine, a prison sentence up to seven years can be given to people that use cryptocurrency. This is a significant punishment in contrast to the fine.
The proposed legislation would also allow the Russian government to seize coins. Cryptocurrencies held by exchanges could now be confiscated. The legislation mentions that a court order needs to be issued to confiscate funds.