A response has been prepared by the Russian government of the draft bill “On Digital Financial Assets” that is yet to be presented in the State Duma. The review states that the crypto to fiat transactions equivalent to or more than 600,000 roubles will be subject to regulations.
Review of draft cryptocurrency bill “on digital financial assets”
According to the local Russia media channel, the Russian government has prepared a review of the draft bill “On Digital Financial assets”. The review states that the exchange of cryptocurrencies for fiat for an amount equivalent of 600,000 roubles (about $9,600) or over and above is subject to mandatory exchange regulations.
Though the review has already been prepared, it is yet to be presented to the State Duma, according to the head of the financial market committee, Anatoly Aksakov. It has also been reported that Russian banks are already tracking the transactions involving more than 600,000 rubles to combat terrorism financing and money laundering. Moreover, the government is considering taxing the profits from cryptocurrency transactions as well.
The draft bill, “On Digital Financial Assets” that has been submitted to the State Duma on March 20, 2018, has been similar to the one published in January, on the website of the Ministry of Finance of the Russian Federation.
The cryptocurrency bill defines digital currencies as digital financial assets that can be traded only on the authorized crypto exchanges and further states KYC regulations for ICOs. Apart from this, the bill also requires crypto exchanges to verify the user accounts for preventing terrorism financing and AML.
Cryptos are property: Profits from crypto transaction likely to get taxed
According to the Federal Financial Monitoring Service of Russia, crypto exchange operators must subject to the Article 5 of 115-FZ that is to prevent money laundering or the operators will lose their license.
The president of the Russian Association of Cryptocurrency and Blockchain (RACIB), Yuri Paripachkin points out that this latest version of the bill that has the crypto transactions come under the bank and federal Financing Monitoring Service Control might force Russian crypto miners to look for other jurisdictions that are more crypto favorable. However, the bill review doesn’t say anything about the tax on crypto mining profits.
The draft bill defines cryptocurrencies as property and not a legitimate payment system, hence, the government is inclined towards taxing the transactions involving digital currencies. An associate professor at the Russian Presidential Academy of National Economy and Public Administration, Teimuraz Vashakmadze says a 13 percent tax could be imposed on crypto traders, however, their anonymity can make this difficult as put by him:
“If the person themselves does not announce that they bought and sold Bitcoins, then no one will know about it, so many people will not voluntarily declare such income.”
How do you think this review and further the cryptocurrency bill can affect the Russian crypto market?
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I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.