In recent months, Russian legislators have been preparing measures to fully institutionalize cryptocurrencies as a properly taxable investment asset and a possible tool for foreign trade in Russia. Now they want to be clear that the upcoming regulatory turnaround will not include any windows for accepting digital financial products as a payment method.

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On Tuesday, June 7, Anatoly Aksakov, head of the financial markets committee of the lower house of the Russian parliament – the State Duma – introduced a bill banning the use of “digital financial assets” (DFA) to pay for any goods or services. As a cover note specified:

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“The ruble is the official monetary unit (currency) of the Russian Federation. This article establishes a ban on the introduction on the territory of the Russian Federation of other monetary units or monetary surrogates.

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The bill belongs to existing legislation, which does not explicitly prohibit the use of DFA as a payment method, although de facto such transactions are still not considered legal in the country. The new document will make this ban official and oblige DFA exchange managers to refrain from any transactions related to the use of cryptocurrency as a money surrogate.

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The bill also introduced the concept of “electronic platform”, which is broadly defined as a financial platform, investment platform or information system in which digital financial assets are issued. Electronic platforms will be recognized as subjects of the national payment system and are required to submit to the central bank registry. Each major transaction with DFA – their issue, circulation, exchange and trade – will receive its own register.

The current law on digital financial assets came in force in 2021. In May 2022, the tax amendments for the Central Federal District passed the first reading in the State Duma. In a separate development, two other important bills continue their way through the legislative process – the Digital Currency Bill will define the regulatory framework for cryptocurrencies in general, and the Mining in the Russian Federation Bill should set guidelines for miners.