Last October, Russian President Vladimir Putin made headlines when he announced that he may accept cryptocurrencies as payment in future transactions.
It seems the leader was true to his word as the Russian government released a statement on Tuesday announcing it had reached an agreement with its central bank on how to regulate cryptocurrencies.
The two together are working on a draft law, set to be launched on February 18, that will see crypto go beyond being a mere digital financial asset to becoming a valid currency.
The Russian future of cryptocurrencies
"The government has determined the future of digital currencies in Russia. The turnover of such financial assets will be regulated by the state with strict obligations for all participants in the professional market and an emphasis on protecting the rights of ordinary investors," said the government statement.
Currently, cryptocurrencies in Russia need to have complete identification through the banking system or licensed intermediaries in order to function legally. Bitcoin transactions are not prohibited in the Russian nation; however, they must be executed through a bank with a universal license or a peer-to-peer exchange licensed in the country.
A move different from the past
Under the new law, cryptocurrency transactions of more than 600,000 rubles ($8,000) would need to be officially declared to the Federal Taxation Service in order to avoid being processed as a criminal act. In the past, the Russian Federation has been quite adept at tracking and thwarting illegal cryptocurrency mining and the country's central bank has even called for a ban on crypto mining and trading.
The new law, however, was approved by the Bank of Russia, the Ministry of Finance, the Ministry of Economic Development, the Federal Taxation Agency, the Ministry of the Interior, the Federal Security Service, the Prosecutor General's office, and anti-money laundering watchdog Rosfinmonitoring. According to the Russian newspaper Kommersant, the new measures will see cryptocurrencies regulated just like foreign currencies and will come into effect in the second half of 2022 or early 2023.