Breaking: Russian President Signs Law That Bans Digital Assets for Payments in the Country
- The new Russian bill is an amendment to a previous bill prohibiting crypto payments in the country.
Russian president, Vladimir Putin, has approved a bill proposal to ban digital assets’ use for payments throughout Russia. The confirmation of the ban was part of an official policy amendment released on July 14. This bill was approved by Russia’s lower house of assembly, popularly known as the Duma, last Friday.
Under this amended policy, cryptos (utility tokens and digital securities) are not acceptable for settling transactions involving goods, services, and products across the nation.
Is Russian Crypto Ban in Response to Global Sanctions?
This bill is an amendment to a 2020 digital asset policy that bans using cryptos for making payments. Earlier in the year, Russia’s Finance Ministry proposed a bill to the parliament over regulating cryptos across Russia.
The intention of the finance ministry contradicts that of Russia’s central bank. Instead of regulation, Russia’s central bank is pushing for an outright ban on crypto activities.
Also, it suggests the launch of the digital Ruble instead of private digital assets such as bitcoin. Furthermore, Russia’s central bank proposes fines for individuals and businesses involved in the trading and issuance of private digital currencies.
In contrast, Russia’s finance ministry suggests that cryptos should be used as investment tools and not a legal tender. Hence, they can be used to settle financial transactions. The ministry also states specific conditions before crypto exchanges or asset providers can obtain an operating license.
Also, it proposes that non-local crypto firms must be duly registered with the appropriate Russian agency before providing their services to Russians. Based on this view, the finance ministry’s proposal is the one approved by the Russian president.
Many top economies have accused Russia of evading economic sanctions using cryptocurrencies. There have been various sanctions on Russia after it invaded Ukraine in February this year.
Following various economic sanctions over its invasion of Ukraine, Russia has been making moves of its own. It has started pressuring importers of its oil and gas across Europe to pay in Rubles. Hungary has already agreed; however, Germany isn’t on board yet. Also, a wall street journal report stated that Saudi Arabia is considering the proposal.
However, China is seeking to pay for Russia’s oil in yuan. If Russia succeeds with its moves, it would be a big challenge to the US dollar-dominated global system in oil transactions. An agreement between Russia, China, and India means it is a matter of when before smaller nations conform to the new dispensation.
Many of these smaller countries will align with these three nations because it would free them from the financial mercy of the USD-dominated payment system. Hence, it is no wonder Russia’s central bank is accelerating its schedule for the pilot test and launch of the digital Ruble.
In an interview with a local media outlet last, the first deputy chairman of Russia’s central bank said the bank plans to have a pilot test of the digital Ruble by April 2023.