THE NEW LAW APPEARS SEVEN MONTHS AFTER THE RUSSIAN CENTRAL BANK ASKED FOR BAN ON CRYPTO AND MINING!
Today, a law was brought into effect in Russia by President Vladimir Putin that forbids the use of digital assets, such as crypto and NFTs, as payment for goods and services there.
The law, passed seven months after the Russian central bank asked for a ban on crypto use and mining, regulates rather than outright prohibits the possession of crypto and other digital assets. The law states, “Except in cases provided for by federal laws, it is prohibited to transfer or accept digital financial assets as a counter-provision for the transferred goods, work performed, services provided, or other methods that allow assuming payment by the digital financial asset of goods (works, services),”
The demand for a ban in January was made because digital assets are dangerous to the economy and welfare of the populace. At the time, the central bank declared that the “breakneck growth and market value of cryptocurrency is defined primarily by speculative demand for future expansion, which produces bubbles.” Cryptocurrencies resemble financial pyramids because their price increases are driven mainly by demand from new market entrants.
The precise number of Russians who the new prohibition will impact is unknown. However, since cryptocurrency mining isn’t mentioned, the rule shouldn’t affect Russia’s mining industry, which was the third-largest worldwide as of April. In addition, most Russians won’t notice much difference because the law does not forbid cryptocurrency ownership or direct trading.
Russia has an odd history regarding cryptocurrencies, sometimes trying to outlaw them and then seemingly trying to legalize them. For example, while Russian banks were preparing cryptocurrency pilots in 2018, opposition groups in Russia gathered.
Following Russia’s invasion of Ukraine in February, attempts were made to have cryptocurrency exchanges suspend the accounts of Russian citizens. However, the majority of exchanges rejected the request. As part of a crackdown on businesses and people evading sanctions against Russia, the U.S. Treasury Department sanctioned Bitriver AG, a firm that mines cryptocurrencies owned by Russians, in April.