Russia’s Bill on Banning Crypto as a Payment Method Passes First Parliament Reading

Vignesh Karunanidhi
Russia’s Bill on Banning Crypto as a Payment Method Passes First Parliament Reading

Russia’s bill that would impose a complete ban on payment using crypto passes the first reading in parliament.

Last week, Russia’s lower parliament chamber submitted a bill to outlaw cryptocurrencies as a payment mechanism, causing confusion about the country’s stance on cryptocurrency. In recent months, investors have seen Russian officials and politicians attempt to fully integrate and institutionalize cryptocurrency.

The country has been working to make cryptocurrency a taxable financial asset and a tool for international trade. When the bill was introduced last week, it created a point of doubt about which direction the bill would head. Now it seems like the dream of legalizing crypto as a payment method in Russia is slowly fading away.

The law will ban digital financial actives from goods and service payments in Russia

The news was let out by the local media in Russia. The bill, which was sponsored by the Financial Markets Committee head, passed the first reading with a reservation.

The bill faced criticism for tight regulations around tokenized assets and digital rights. One of the biggest theoretical flaws in the bill is that it considers DFAs, which are known as tokens rather than cryptocurrencies, as a payment method while they are most commonly used as security tokens.

The new bill formalizes the prohibition, requiring DFA exchange managers to decline any transactions involving the use of cryptocurrencies as a form of payment.

The electronic platform concept is also discussed in the new bill. It refers to platforms that issue and deal with digital assets in general. The platforms would also have to hand up their data to the national bank. There is an existing law on the Digital Financial Actives, which was enforced in 2021. If the bill successfully moves forward, Russian investors can forget about using crypto as a payment method.