Russian Finance Ministry submits bill to regulate cryptocurrencies

The Russian Ministry of Finance has prepared and submitted to the government a draft law ‘On Digital Currency’. As reported on the ministry’s site.

The document is the approved concept for regulating the turnover of cryptocurrencies.

According to it, the use of cryptocurrencies as a means of payment within the territory of the Russian Federation is prohibited — such assets are regarded solely as an investment instrument.

The bill sets out requirements for cryptocurrency exchanges and exchangers. A special registry of operators will be created for them.

Companies will be required to obtain licenses, oversight will be entrusted to an authority designated by the government. Foreign exchanges seeking to operate in Russia would have to register in the country.

The requirements for such firms will cover corporate governance, reporting, data storage, internal control and audit, risk-management systems, and the adequacy of capital.

Under the Finance Ministry’s proposal, the input and output of cryptocurrency will be conducted only through banks.

Transactions in cryptocurrencies will be allowed only upon customer identification. This will be carried out by operators when onboarding clients for service, as well as by banks when opening accounts.

Operators and banks will be required to report suspicious transactions to Rosfinmonitoring.

Potential investors before purchasing cryptocurrencies will have to undergo online testing to determine their knowledge about the specifics of cryptocurrencies.

If they pass the test successfully, citizens will be allowed to invest up to 600,000 rubles annually in digital currencies. Otherwise, the cap on investment will be limited to 50,000 rubles. The Finance Ministry had previously spoken about establishing limits for non-qualified investors.

Qualified investors and legal entities will be able to conduct transactions without limits.

Exchanges will be required to segregate their own cryptocurrencies from clients’ assets. It is anticipated that citizen’s digital currencies will not be subject to seizure for the debts of the trading platform operator.

The funds of trading participants will be kept on nominal accounts, and exchanges and exchangers will be required to maintain registers with the identifier-address of each owner of crypto assets.

The document also defines mining as an activity aimed at obtaining cryptocurrencies. The bill also sets out a mechanism for informing the tax authorities with information necessary for them to carry out their control and supervisory functions.

The Ministry of Finance stressed that it has received Bank of Russia proposals to ban the issuance and circulation of cryptocurrencies and to introduce liability for related violations.

“The Bank of Russia’s proposals will be taken into account in further work on the bill to the extent that they do not contradict the approaches of the Ministry of Finance of Russia,” noted the ministry.

The ministry sent its bill to the government on February 18, and the public discussions of the document began then.

Earlier, the Bank of Russia prepared two bills on banning cryptocurrencies and fines up to 1 million rubles.

The Bank of Russia has taken a hardline stance toward the Bitcoin market, while the Finance Ministry intends to regulate the industry.

A detailed analysis of the ministry’s proposed concept can be read at the link below:

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