Key points to remember
- Russian President Vladimir Putin today signed a law banning the use of cryptocurrencies or other digital assets as payment for goods and services.
- The law should be enforced by holding crypto exchanges and companies accountable for violations.
- Nevertheless, the Russian central bank is considering accepting the use of cryptocurrencies for international payments.
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Russian President Vladimir Putin has signed a bill making crypto payments illegal, reaffirming that the ruble is the only currency unit accepted in the Russian Federation.
Banned Domestic Crypto Payments
Russia has made crypto payments illegal.
According to the Russian Legislative Support System websiteA federal law prohibiting the use of digital financial assets as payment was signed into law by Russian President Vladimir Putin yesterday.
Under the new law, digital assets and digital rights are no longer accepted as “monetary substitutes” and therefore cannot be accepted as payment for goods and services. Other monetary units are also prohibited, reaffirming the ruble’s place as the only officially accepted currency within the Russian Federation.
Compliance will be ensured by holding exchange operators and companies accountable for any violations. Under Russian law, these operators are considered “subjects of the national payment system” and must comply with regulations which, among other things, limit the types of transactions they are allowed to carry out and prohibit the supply of products leverage and returns to their clients.
Financial assets can now be directly acquired by the Russian state without the involvement or consent of the exchange. Securities backing digital assets may also be legally terminated without notice to asset holders.
Russia has shown an ambiguous stance towards crypto. In May, the Russian central bank noted he was open to the idea of using cryptocurrencies for international settlements, but not necessarily domestically. On the other hand, Russia’s Minister of Industry and Trade said that crypto payments will be made legal “sooner or later in one format or another.”
Russians abroad won’t necessarily have more access to cryptocurrencies, as sanctions have prohibited certain crypto exchanges to provide services to Russian citizens in the European Union.
Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.