Crypto As Payment Means Outlawed In Russia After Putin Law Signing

Vladimir Putin, the President of Russia, has recently signed a new law. This law will officially prohibit the usage of cryptocurrencies in order to facilitate payment within the country, and will be in effect by 2021. At the same time as this, Russia’s government has recently begun to utilize blockchain technology in order to facilitate its constitutional amendment

Crypto Payments Illegal For Russia Come 2021

RIA, a local news outlet, went into detail on Friday about the matter. RIA explained that President Putin’s bill he just signed will see to the prevention of using crypto to pay for goods and services within Russia for its general citizens. However. What this bill will do, is enable the transactions through digital financial assets (DFA) within the country.

Alongside this, government officials, as well as any individual prohibited from possessing overseas accounts, are officially forbidden from owning any form of cryptocurrency.

Terms And Conditions Apply

Anatoly Aksakov stands as the Head of the State Duma Committee on the Financial Market, and gave comment about this new bill, as well. Aksakov explained that Russia’s government has officially defined cryptocurrencies as a means of investment, payments, and savings. With this new law, Aksakov will see the Russian Ruble stay the only form of legal tender within the borders of Russia, which is something any country desires.

With this new law given official approval by the government, it should be noted that there’s a key stipulation within the article. Individuals and legal entities of Russia will be capable of challenging transactions made with digital currencies within the court. However, this will only be the case if they have already declared the transactions themselves, as well as the fact that they possessed crypto, to begin with.

It was back in May when Russia’s lawmakers started to propose a bill that would make the trading and issuance of crypto illegal within the country.  This original proposal planned on smacking offenders with fines of up to two million Rubles, as well as enforcing prison time. However, it wasn’t long before reports started to flow in that the State Duma was aiming to remove the criminal implications of the proposed bill.

Russia Likes Blockchain, But Not Crypto

The long and the short of this new bill is this: Crypto, as a payment means, is banned. However, companies are still capable of issuing DFAs, should they gain the approval of the Bank of Russia.

The tokenized securities can be exchanged for other assets, with these transactions being first approved, then monitored by the Russian central bank. Modalities will be developed by the bank of Russia to evaluate DFAs, as well, determining if they’re suitable for investment or not. Even so, it should be noted that DFAs cannot serve as a means of payment, just like its cryptocurrency counterpart.