Reports in Russia has claimed that the government is making silent moves to frustrate holders of leading crypto, Bitcoin by making its use nearly impossible for citizens in the country.
Russia is on the verge of achieving a milestone when it comes to regulation of digital assets after official documents to the effect have been accepted. This move means that the rules would take effect starting from January 2020 and a backward movement when it comes to crypto activities in the country.
Going by the new regulations, crypto holders would face certain restrictions on the volume of digital assets they can buy as well as what they can purchase with it.
New Russian crypto policy half baked, lawyer claims
The government has always reiterated that it is not comfortable with its citizens dealing in digital assets because the assets are often used for illegal activities. Meanwhile, Russia is making a surge ahead to launch its digital Rubble which means that regulations would favour the country’s digital assets over crypto assets.
The Russian government spent close to three years looking for ways to regulate digital assets before the President, Vladimir Putin finally signed off on the new Digital Financial Assets (DFA) bill in July.
Rrussia itThe above showed that despite the long time spent trying to come up with a framework to regulate crypto, it still turned out to be half baked. Most crypto dealing Russians are still confused because the act didn’t specifically mention what should and should not be considered as digital assets.
Lawyers who studied the bill carefully said that the government were still undecided on its policy towards crypto. Furthermore, the government announced that digital assets would not be regarded as money because Russians will not be allowed to purchase goods and services with digital assets. This one regulation is expected to limit the uses of digital assets around the country.
Experts say the new policy will reduce Russian market volume
The new regulation sets a new threshold of 600,000 rubles ($7,650) a year for dealing in digital assets. Furthermore, any entity that wants to receive 100,000 rubles ($1,275) in digital assets will need to inform authorities about the assets in their possession and report such transactions.
Making matters worse, DFAs are not limited to crypto-assets alone, which means investors have to be careful to note other assets that fall under this new policy. Failure to adhere strictly to the policy would result in fines while some cases may land users in jail for up to seven years.
Experts have argued that the new policy would signal a reduction in activities in one of the most active markets in the crypto space. According to LocalBitcoins, the volume of transaction carried out in Russia have increased at a swift pace.
LocalBitcoins announced recently that the Russian crypto community spend about half a billion rubbles on Bitcoin every week. Binance also has a dedicated management team that is in charge of Russian customers due to their seemingly large market. When the new policy takes effect, the market volume in the country will experience a reduced market volume.