Russia’s contradictory bill: crypto money to be allowed but rouble to remain ‘the sole legal tender’

By Andrei Skvarsky.

Russia’s Finance Ministry has written a contradictory draft law on “digital financial assets” which would allow crypto-currencies to be used within Russia for making purchases but would declare that crypto money “shall not be a form of legal tender” within the country.

The planned legislation would permit “digital financial assets” – a category in which the ministry includes crypto-currencies – to be exchanged for “roubles, foreign currency and/or other property”. This means it would be allowed to pay crypto-currency for goods.

However, a preceding passage in the bill, which is published on the Finance Ministry website, contains a sentence reading: “Digital financial assets shall not be a form of legal tender on the territory of the Russian Federation.”

The same point is made emphatically in a Finance Ministry statement announcing the bill.

The first paragraph of the statement contains the reservation that “the rouble shall retain its mandatory status as the sole legal tender” within Russia.

“It must be pointed out,” the statement says further down, “that there is no plan to permit the use of crypto-currencies as legal tender on the territory of the Russian Federation.”

The statement also says work is nearly over on a draft law to penalise the use of “surrogate money” as a means of payment.

The ministry admits in the same statement that its plan to allow transactions with the use of crypto-currencies is at odds with the policy of the central bank, which wants a ban on any such deals and would only accept the issue of crypto tokens as part of some fundraising projects.

In taking issue with the central bank’s stance, the ministry argues that deals based on crypto-currencies have become so common that a legal ban on them would stimulate crime such as the use of crypto-currencies for “servicing illegal business”, money laundering or the financing of terrorism.

Specialist agencies – “exchange operators for digital financial assets” – would be the only legal channels for transactions where crypto-currency changed hands, the ministry says.

This would “significantly reduce” risks of criminal use of digital money and help to create “a transparent tax regime”, thereby serving to increase state revenues.

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