Hodlers in Russia have reasons to smile today, as holding cryptocurrencies in the country may soon be legalized. According to the February 8 announcement, the Russian government and central bank are jointly preparing a draft law defining cryptocurrency as a currency. The Bank of Russia has now reached a consensus with the country's government on how to regulate cryptocurrencies. The two institutions intend to legalize cryptocurrencies and adopt clear industry rules that will spur growth and protect investors through a bill that will be completed by February 18.
Under the proposed guidelines, cryptocurrency transactions will only be allowed through banking systems or authorized companies. In a nutshell, banks will be able to act as intermediaries between users and cryptocurrencies. Such banks will use a transparent blockchain transaction tool developed by Rosfinmonitoring to verify transactions for signs of illegal activity.
Specifically, users will be required to report cryptocurrencies worth over 600,000 rubles to the Federal Tax Service, otherwise they risk being prosecuted. Additionally, there will be heavy fines for illegally accepting cryptocurrencies as payment methods.
The announcement states that the Russian government intends to protect the rights of investors while at the same time limiting the use of cryptocurrencies in shameful activities. To this end, the government intends to control cash flows through the credit institutions.
The report comes after months of uncertainty about the real position of Russia when it comes to cryptocurrency. Last month, the central bank called for a total ban on cryptocurrency mining and trading. However, just a week later, Russian President Vladimir Putin appeared to support regulation and taxation of cryptocurrency mining due to the "competitive advantage of the country".
At the moment, it is difficult to say how the proposed bill will affect investors and businesses operating in Russia. However, Russia could prove to be an attractive destination for startups, talents and projects in the cryptocurrency sector in the future.