Russia to set rules for international crypto payments by year’s end
According to a fintech specialist in the Russian State Duma, Russia may become the first jurisdiction in the world to allow cross-border crypto payments while prohibiting local crypto payments.
Russian Prime Minister Mikhail Mishustin issued an official directive to the cabinet on Tuesday to reach an agreement on crypto legislation in Russia by December 19, 2022.
The prime minister expressly requested that the Duma and other state institutions develop coordinated rules to regulate the issuance and circulation of digital currencies in Russia. Mishustin also requested that regulators finalize legislation for cryptocurrency mining and cross-border digital currency transactions.
The official emphasized that the next proposed crypto rules should be in line with the Russian Finance Ministry, central bank, anti-money laundering authority Rosfinmonitoring, Federal Tax Service, and Federal Security Service.
The most recent news provides yet another official proof that Russia is becoming more serious about the use of cryptocurrency for cross-border commerce.
Last week, Deputy Finance Minister Alexei Moiseev announced that the Bank of Russia and the finance ministry had reached an agreement to legalize cryptocurrency for cross-border payments. Despite its willingness to allow cross-border transactions, the Russian central bank remains hostile to the authorization of local crypto exchanges and the use of bitcoin as a form of payment.
The possibility of prohibiting domestic crypto exchanges while permitting cross-border payments appears to pose several concerns, especially given that Russia has yet to develop a framework for such regulations.
According to Maria Agranovskaya, a legal attorney and fintech expert in the Russian State Duma, Russia may be the first jurisdiction in the world to legalize cross-border crypto payments while prohibiting local crypto payments. “To my knowledge, this isn’t a common strategy,” she remarked.
The question of how Russia intends to discern between local and cross-border crypto payments remains unanswered, according to Agranovskaya. “This differentiation does not yet exist.” “For the time being, all ‘foreign’ crypto is treated as digital currency,” she stated, adding:
“It is absolutely unclear at the moment. I presume the matter shall be in line with the currency control regulations — tax residents in the local territory would not be allowed to use crypto for payments internally.”
Despite enacting its primary crypto-related law, “On Digital Financial Assets,” in 2020, Russia has emerged as one of the most uncertain jurisdictions for crypto. The rule forbade Russians from using cryptocurrencies as payment but did not restrict crypto trading or mining in the country. Russian financial officials have not licensed any local cryptocurrency trading platforms, instead permitting crypto trades through overseas cryptocurrency exchanges such as Binance.