Russian President Vladimir Putin has signed a bill banning payments in digital financial assets. The bill mandates exchange operators to refuse to process transactions that promote the use of DFA, the legal category that currently covers cryptocurrencies, as a “monetary substitute.”
President Vladimir Putin has approved a bill
that would ban payments for digital assets in the Russian Federation.
Russian President Vladimir Putin has signed a law imposing direct restrictions on the use of digital financial assets (DFA) as a means of payment in his country, the crypto page of the RBC business news portal reported. The ban also applies to utility digital rights (UDRs).
Russia has not yet comprehensively regulated cryptocurrencies, but a law “on digital financial assets” that took effect in January 2021 introduced two legal terms. Russian officials have noted in the past that DFA encompasses cryptocurrencies, while UDR applies to a variety of tokens. This fall, Russian lawmakers will consider a new bill, “On Digital Currencies,” designed to fill the regulatory gap.
Thebill, which was approved by the Russian head of state, was submitted to the State Duma, the lower house of the Russian parliament, on June 7 by Anatoly Aksakov, chairman of the Financial Markets Committee, and adopted one month later. Until now, Russian law did not explicitly prohibit payments by digital assets, but “monetary substitutes” were banned and the ruble’s status as the sole legal tender was enshrined.
The bill makes it illegal to exchange DFA for “goods transferred, works performed, or services rendered,” but leaves the door open for cases of DFA payments envisioned in other federal laws. As financial restrictions imposed as part of Western sanctions over the invasion of Ukraine grow, a proposal to legalize small crypto payments in foreign trade with Russian partners is gaining support in Moscow.
In addition to prohibiting direct payments in digital financial assets, the law requires operators of platforms offering exchange services to reject any transactions that could lead to the use of DFAs to substitute the Russian ruble as a means of payment.
The new law is scheduled to enter into force 10 days after its publication in the Russian Official Gazette. Regarding its exemption options, RBC reports that Russian legal experts have already highlighted certain controversies in the document.
Image Credit: Shutterstock, Pixabay, Wiki Commons, Evgenii Sribnyi.