BTC transactions illegal within Russia, international trades allowed

June Update

The bank of Russia has announced that international Bitcoin transactions will be legal while BTC trading within Russia are now illegal.

"Cryptocurrency should not be used as a means of calculation within the country... As for use in international settlements, if it does not penetrate the Russian financial system, it is possible," ~ Elvira Nabiullina

February 9th, 2022

Russia to recognize bitcoin and crypto as currency

The government and the Bank of Russia agreed on future governance for the circulation of crypto assets within Russia. By February 18, they will prepare a draft law, in which cryptocurrencies are recognized as an analog of currencies, and not digital financial assets (DFA)

Правительство и Банк России договорились о будущем режиме обращения криптовалют в России: до 18 февраля они подготовят законопроект об обращении цифровых валют в РФ, в котором криптовалюты признаются аналогом валют, а не цифровых финансовых активов (ЦФА)

The bank of Russia proposed a crypto ban in mid January.

“The best solution is to introduce a ban on cryptocurrency mining in Russia,” ~ bank of Russia

However, the president, Vladimir Putin came out in support of crypto taxation & regulation instead.

“We also have certain competitive advantages here, especially in the so-called mining, ~ Putin

According to this report, the draft law will feature several clarifications:

Holding Cryptocurrency worth 600k rubles will be illegal if not conducted via legal channels

Their circulation in the legal sector will be possible only with full identification, through the banking system or licensed intermediaries. Operations equivalent to more than 600 thousand rubles must be declared.

Transactions outside the legal sector for such amounts will become a criminal offense and an aggravating circumstance under the Criminal Code, fines will be introduced for the illegal acceptance of cryptocurrencies as a means of payment. Mining and related issues of DFA are not affected by the concept within which the project is being prepared.

Crypto to be subject to banking rules

The possession of cryptocurrency in the jurisdiction of the Russian Federation and transactions with it (as well as with the dollar) is not prohibited - but only through the "organizer of the digital currency exchange system" (a bank with a universal license) or a p2p exchanger legalized in the Russian Federation.

Proper KYC will be required

The mode of operation of the legal segment involves the complete identification of the client according to banking rules, work taking into account AML / CFT requirements, all information about transactions through the Transparent Blockchain system

by photographer: Andrey Rudakov/Bloomberg

Implications of Russia's crypto 'acceptance' as currency on the crypto market.

Since last weekend, the crypto market has been on a reversal of the decline it saw since the beginning of the year. This reversal is certainly helped by the news from Russia and the change of attitude towards bitcoin by the Indian government.

However, in spite of this progress and the seemingly healthy Bitcoin technicals, the macros still hang in balance. There's still a looming executive order from the US government that could make BTC's trend reversal short-lived.