Cryptocurrencies have had a decent start to the year with improvements in price points and the adoption of its foundation blockchain technology across the globe. At the same time, the rising crypto economy is also something to look around.
At a time when countries were planning to adopt cryptocurrencies, Russia took a complete one-eighty degree turn. Russia was divided at one point on the adoption of cryptocurrencies, but new reports claimed that the agencies in charge had decided to ban its use.
The Federal Security Service [FSB] and the Central Bank of Russia have both decided that any and all transactions related to cryptocurrencies should be banned from the country. Prior to this, the FSB was open to legalizing crypto while the Central Bank was vehemently against it. Dmitry Chernyshenko, the Deputy Prime Minister of Russia said:
“A decision was made following a meeting in the government to establish a ban on the issuance and use of cryptocurrencies as a means of payment.”
The decision came as a surprise to many because Russia was almost on the verge of legalizing digital assets. Even officials in high offices had sided with crypto usage albeit in a measured way. The new law, which is slated to be passed soon will allow existing users to convert their crypto for fiat currencies. This exchange will be conducted under the control of special operators.
The decision came as a surprise to many, as Russia was almost on the verge of legalizing digital assets. Even officials in high offices had sided with the use of crypto, albeit in a measured way. The new law, which is expected to be passed soon, will allow existing users to convert their crypto into fiat currencies. This exchange will take place under the control of special operators.
At present, if anyone wants to convert all their crypto holdings to fiat, then they would have to go through legal procedures. If the individual fails the procedure, then they can be penalized by the FSB. The turnaround comes a few weeks after Russia’s new prime minister had proposed the idea of taxing cryptocurrencies. Mikhail Mishutin had stated that cryptocurrencies can be regulated if the government could keep an eye on it.
His ideas included people revealing their crypto holdings to set a proper tax bracket. This was also Mishutin’s way of assessing economic consequences using cryptocurrencies. Russia’s latest move may be indicative of its internal steps to build its own cryptocurrency ecosystem. This fact was backed up by a new legal framework released by the Central bank for tokenizing assets.
The bank had recently revealed that it had put a platform to test that will allow users to tokenize digital assets. This would include not just currencies but also equities. After the pilot, the bank added tokenization of assets into the draft of the federal law ‘On Digital Financial Assets’. The platform was the basis on which the new cryptocurrency laws were formed.
It is still unsure if Russia will take China’s route to create its own asset. Some claim that the Kremlin has already put the wheels into motion while others have said that Russia is only interested in blockchain technology.
Source: International Business Times