Russian Regulators Decided on Crypto Terms


Published on 29 Dec. 2017
Law 1063249 1280

The Ministry of Finance and the Central Bank of Russia have worked out the general definitions and regulations of the digital assets. This event was announced by several publications. As was known earlier, the president of Russia instructed the government on creating such a document.

As ТАСС reports, except defining the terminology, the state has already admitted a status of cryptocurrencies. Unlike neighboring Belarus that fully legalized cryptocurrencies the day before, Russia unsurprisingly has turned out to be less liberal. The Central Bank representative has announced that the Bank of Russia does not and will not consider cryptocurrencies as a means of payment.

Definition of Cryptocurrencies

In the law project, according to the meeting materials, cryptocurrency is defined as a type of digital asset, created and added to the distributed register of the digital transactions by the members of the given register according to the rules of its maintenance. At the same time, no cryptocurrencies will be used on the Russian territory for payments abreast the state currency.

Ministry of Finance suggests defining cryptocurrencies as other property. Aleksei Moisieiev, Deputy Minister of Finance, said that one could purchase or exchange cryptocurrency on other property, including the exchange within the ICO, however one couldn’t pay for the goods with it.

No Crypto Ruble

The perspective of creating and launching the national cryptocurrency was erased entirely from the possible projects. Moisieiev stated that he didn’t see the necessity of starting the crypto ruble. He explained that cryptocurrency had an unlimited number of emission centers, so regulators wouldn’t be able to assure the total reliability of the transactions with those assets.

A representative of the CB also supported the rejection of national digital cryptocurrency. Olga Skorobogatova, Deputy Head of the Central Bank, mentioned that the implementation of cryptocurrency was possible within the limits of BRICS or EAEU only.

ІCO Regulation

In contradiction to cryptocurrencies, regulators marked the perspectives and economic value of ICO, although ICO, as well as cryptocurrencies, work on the blockchain. Token issuer releases a coin, registers it, and can sell it for rubles or exchange for the cryptocurrency. Ministry of Finance planned to forbid ICO token owners to sell them to anyone except their issuers. The law project has a limit on the volume of participation in ICO. Investors, not defined by law as qualified ones, will be able to purchase ICO of one kind for no more than 50 thousand RUB.  

Mining and Taxation

Law project also has a definition of mining – it is an entrepreneurship on the creating and validating cryptocurrency with the aim of receiving a reward in the same cryptocurrency.

Ministry of Finance offers to tax mining similar to other entrepreneurship of individuals and entities. Moisieiev stated that there were no instructions on mining taxation in the law so the general norms of the tax legislation would be implied.  

There will be no limit for the minimal volume of mining for taxation. Tax Service will decide on this question based on the correlation between expenses on miners’ taxation and potential income. In the context of the costs of the Federal Tax Service, it is inexpedient to adjust the whole service to the work with small volumes,

 - highlighted Moisieiev.

Except for definition of crypto terms and cryptocurrency status, at the beginning of December, the government announced the addition to the Criminal Code on mining, cryptocurrencies, and payments with them, as far as criminalization.

 


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