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Russia’s Ministry of Finance’s proposed crypto bill will restrict trading only to license platforms

The Finance Ministry’s move highlights its determination to regulate crypto mining and trading as opposed to the Bank of Russia’s preference of implementing a full crypto ban.

Photo by Oleg Shakurov of Pixabay

Fri, 25 Feb 2022, 08:05 am UTC

Russia’s Ministry of Finance has introduced a bill to parliament as it pushes ahead with its plan to regulate crypto in the country. The proposed bill will introduce restrictions in crypto trading as the activity will now be limited only to licensed platforms and wallets.

In a press release, the Ministry of Finance said that the bill was presented to parliament on February 18, Coindesk reported. It was based on the previously approved roadmap that was drafted by various government bodies and law-enforcement agencies.

The Ministry of Finance’s proposed bill on regulating cryptocurrencies would limit crypto trading by Russian residents only to license operators, which would render peer-to-peer trades illegal. In addition, only certified crypto wallets will be allowed to do crypto trades.

The bill has not yet been published on the parliament website but Coindesk got hold of the draft from a legal expert. The Finance Ministry’s announcement also highlights its determination to regulate crypto mining and trading as opposed to the Bank of Russia’s preference of implementing a full ban on crypto ownership, trading, and mining.

Digital currency is defined as property under the proposed bill and “electronic data stored in an information system that can be used as payment while not being a legal tender in the Russian federation, or as an investment tool without any entity backing it.”

However, the bill will also introduce new requirements for both traders and platforms. For instance, there will be a minimum requirement of 100 million rubles (1.2 million) in assets for crypto exchanges and 50 million rubles in assets for professional traders before they can be approved for trading in digital currencies. Meanwhile, offshore firms are not allowed to operate as crypto intermediaries.

People changed with terrorism financing and extremism will not be allowed to chair digital currency operators. The bill will also subject crypto exchanges to annual financial reporting requirements.

Bitcoin and crypto miners will be required to report their income to tax authorities. Big miners will be mandated to register to a dedicated list of miners while home-based miners will be exempted unless they exceed a certain threshold in power consumption.

“Creating official registers [for cryptocurrency exchanges and miners] are a normal regulatory practice in Russia,” Russian lawyer Mikhail Uspensky said. He added that “there is a powerful coalition in the executive branch of power against the total crypto ban.”

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