Russia Drafts Crypto Regulations but Won’t Legalize Digital Currency Payments

Russian legislators work to provide legal definitions of cryptocurrencies and tokens

by Nina Dimitrova
18 May • 2 min
In News

Russia’s State Duma is working on amendments to the country’s civil code concerning virtual currency in an attempt to set the legal framework for protection of participants in the largely unregulated digital environment. Under the bill, digital currencies will not be accepted as a legal means of payment, but they can be used as such “in controlled quantities.” 

“We have to establish basic legal terms in the civil code and translate them into the stricter language of the law”, PM Dmitriy Medvedev told a legal experts’ forum in Saint Petersburg. “That’s why, instead of “cryptocurrencies” and 'tokens' the lawmakers are proposing the more definitive legal terms 'digital money' and 'digital rights'.”

Medvedev added that the new regulations in the cryptocurrency industry would provide better legal protection from fraud, in case of disputes and for the prevention of money laundering.

Two draft laws on the matter have been tabled in the lower chamber of the Russian parliament.

The head of the Duma committee on financial markets Anatoliy Aksakov told local news agency RIA Novosti that the self-regulatory Russian Association of Cryptocurrencies and Blockchain (RACB) has proposed the introduction of a list of investors in cryptocurrencies. According to Aksakov, the purpose of the list would be to prevent money laundering and to remove fears of market scams. In his words, the proposal is still under discussion but can be included in the draft bill on Digital Financial Assets between the first and the second reading in the Duma.

The Russian authorities have been on the fence regarding cryptocurrencies for a few years. The country’s financial megaregulator, the Bank of Russia, has been sending mixed signals amid talks for regulation and legalization of cryptos, or about completely banning them. At the same time, the regulator and some of the major local commercial banks have been exploring the potential applications of blockchain, the technology behind cryptocurrencies. At some point last year, there were also been talks for launching an official digital currency – the CryptoRuble.