A new step has been taken towards loosening restrictions on cryptocurrency payments in Russia. The Financial Markets Committee within the State Duma found the updated version of the draft law “On Digital Currency and Digital Rights” suitable for second reading. If the regulation is adopted, it will be possible to exchange one cryptocurrency for another in certain cases and to pay with crypto assets in some transactions.
Payment scope is expanding
In the final version of the draft, investors are allowed to use digital assets in purchasing securities other than public offerings. In addition, the legal basis is being prepared for exchange between different cryptocurrencies and payment of transfer fees in various blockchain networks with cryptocurrencies.
In the Russian Federation, digital currencies and digital rights are allowed to be used as means of payment for securities, other digital currencies or other digital rights.
The Russian ruble remains the only official means of payment in the country, including the digital ruble. However, the text of the law previously included exceptions, such as mining rewards being given in cryptocurrencies and being used in international payments in foreign trade transactions under sanctions. With the latest changes, this exception area has been further expanded.
Market entry conditions are maintained
The basic criteria for cryptocurrencies to be traded on the regulated market in Russia are maintained. Accordingly, an asset must have an average market value of more than 5 trillion rubles in the last two years, its average daily transaction volume in the same period must exceed 1 trillion rubles, and it must have at least a five-year trading history on a licensed foreign platform.
Under current conditions, this threshold can largely be met by assets with the highest market value, such as Bitcoin and Ethereum. The updated text, however, gives the Board of Governors of the Central Bank of Russia the authority to approve cryptocurrencies that do not meet these three criteria.
Due to the definition used in the draft, there is a possibility that large stablecoins such as Tether’s USDT and Circle’s USDC will not be considered digital currencies. The text treats digital currency as an asset that does not have a mandatory issuer.
Wider access to qualified investors
The new framework authorizes trading platform operators to offer almost any type of cryptocurrency to professional investors without prior approval from the Central Bank of Russia. However, restrictions remain for non-qualified investors. Investors in this group will only be able to purchase crypto assets with high liquidity that are approved by the monetary authority.
It was previously announced that these investors will be allowed to purchase cryptocurrencies worth a maximum of 300 thousand rubles per year and to do so through a single intermediary. The new regulation nevertheless expands its reach, because under the current structure, digital asset purchases in Russia are effectively only open to very highly qualified investors.
License period for brokerage firms and exchanges
The bill also introduces a licensing regime for service providers such as stock exchanges, brokerage firms, depository institutions and depository institutions. Additionally, brokerage firms and portfolio managers will be able to trade on foreign exchanges in order to connect the Russian crypto market with the global market.
Chairman of the Financial Markets Committee Anatoly Aksakov announced that the bill was approved by the committee.
Bill number 1194918 8 was initially planned to come into force on July 1. However, due to change suggestions, the process was extended and the implementation date was postponed to September 1. In order for the regulation to become law, the approval of the Federation Council and the signature of Russian President Vladimir Putin are now required.
