The Russian regulators make cryptocurrencies official in Russia. The finance ministry and the central bank will cooperate in providing draft law that regulates the cryptocurrency framework that includes bitcoins. The growing popularity of cryptocurrencies has helped change the minds of the Russian government.
Over the years Russians have chosen cryptocurrencies as a method of payment. People use it for purchasing goods and/or services. Even though the government is inclined towards using the blockchain technology, they are against using cryptocurrencies. The reason behind this is clear, the non-transparent nature and other compliance risks of cryptocurrencies are still feared.
The civil court of Russia had recently amended the “digital rights” notion. On the contrary, there are no direct laws that govern cryptocurrencies. The legislators of Russia are working on laws that will help govern another department of digital rights known as financial digital assets. So that the proceedings and transactions with coins and tokens can be regulated.
In the current scenarios, there are no existing laws that allow cryptocurrencies while there is no legal definition to explain cryptocurrency in the Russian legislature.
The 5 things that you should know
1. The Law of Digital Rights in March 2019 was amended on introducing changes for Civil Code Parts one, two, and four by the Russian legislation. It was introduced as the digital rights notion and regulation that will secure smart contracts and related rules. These amendments have been enforced since 2019 October. Two draft laws, one on financial digital assets, that offer primary rules regarding the offering, issuing, or making payments and transactions. This only concerns the tokens, even the first offering, ICOs, or initial coin offerings. Another one, on using the investment platforms for attracting investments. This is for introducing regulations on events like crowdfunding. Including the tokens that are involved in sales, is the Draft Law for Investment Platforms.
2. It was clear in October 2019 that the digital rights state that digital assets can be bought and sold. It can also be transacted on bank accounts with funds i.e. non-cash or securities like book-entry. The Financial Digital Assets’ law is one that is going to be particularly important when adopted. Now, the temporary draft defines that financial digital assets will be subjected to strong regulations. This law proposes a given few Russian entities will be assigned for operations related to digital asset trading. It will include the licensed Russian credit institutes such as banks and trade organizers such as security exchanges.
3. The tax code of the Russian Federation is applied even though there are no set aside rules for taxing cryptocurrencies. The profits coming from cryptocurrencies will fall under the personal income tax rule. As the Finance Ministry of Russia stated this and had sent two letters containing information on 5th May and 6th July 2018. These letters stated that any economic profit coming from cryptocurrency transactions will be taxed. The taxpayer will have to pay income tax by filing the tax declaration themselves, after calculating the amount they owe.
4. The digital rights assure that owning a digital asset is not illegal. The cryptocurrencies do not have any restrictions specifically and do not require licensing. The system operators should be Russian personnel, who are registered with Bank of Russia or are licensed. But the government does not have any central authority over the exchanges used for trading. Additionally, the concept of a platform for investment has been proposed by the Draft Law for Investment Platform.
5. The bank of Russian and the Russian Government have always supported initiatives for developing blockchain technologies. However, they are continuing to be watchful over the cryptocurrency sector. The sandbox created from the suggestion of the Russian president, now allows new ideas to experiment. Here the risks of violating any present legal restrictions will be nil.
Now that it is legal in Russia, what are you waiting to visit bitcoin era and start trading today? Even though the laws are not that rigid, they are to be taken seriously, or you will run into risks. But if you abide by the rules, that is quite simple you will easily be able to trade digital currencies without drawing the attention of the government.