June 22, 2022

Russia submits its first Bitcoin law proposal

The Russian Ministry of Finance has submitted a draft law on Bitcoin regulation in the country, weeks after the government approved the concept of creating legislation specifically for cryptocurrencies.

“The use of digital currencies as a means of payment on the territory of the Russian Federation will continue to be prohibited,” the finance ministry said in a statement. declaration Monday. “Under the proposed regulations, digital currencies are considered solely as an investment vehicle.”

The bill follows an intense dispute between the Bank of Russia and the Ministry of Finance, who have opposing views regarding the optimal future of bitcoin and cryptocurrency regulation in the country. While the ministry has worked to incorporate the nascent technology into a legal framework, the central bank has repeatedly called for a complete ban on bitcoin trading and mining.

Earlier this month, the Russian government gave the ministry the go-ahead to propose a bill encompassing cryptocurrency regulation, effectively rejecting Bank of Russia suggestions that bitcoin proliferation should not be allowed in the country and outlining an initial plan for legislation. .

The decision to move forward with regulation instead of a ban came on the heels of signals sent by Russian President Vladimir Putin, who in late January underlined the country’s competitive advantages in bitcoin mining – an industry he supports.

The bill submitted by the Ministry of Finance provides several restrictions for Russians wishing to invest in bitcoin, including identification requirements, annual investment limits and custodial agreements, according to the statement.

Russians will need to provide their personal information to buy or sell bitcoins on regulated exchanges, although it is still unclear how much information will be required. Users will also only be allowed to buy around $7,700 worth of bitcoin per year after passing a test procedure to gauge their level of cryptocurrency knowledge. If they fail the test, they will only be able to buy up to around $650 worth of bitcoins per year.

Bitcoin deposits and withdrawals to and from an exchange will only be permitted through accounts at a bank, the statement said. So it looks like users won’t be able to withdraw bitcoin to a self-service wallet.

“Additionally, for the security of client funds for crypto exchanges, a nominal account mode is introduced, on which bidders’ funds will be located,” according to the statement. “Exchanges and exchangers will be required to keep records showing the addresses – identifiers of each holder of digital currencies.”

The bill also specifies requirements for these service providers to operate in the cryptocurrency market, including details on corporate governance, reporting, information storage, monitoring and auditing. internal procedures, risk management measures and the number of reserves that must be held.