Russia’s executive branch has agreed to cap currency purchases for ordinary citizens as part of new legislation that legitimizes investing in and trading cryptocurrencies.
The upcoming rules also reduce the assets that non-professional investors can purchase to more liquid cryptocurrencies that have been pre-approved by the central bank.
Moscow sets a cap on cryptocurrency investments for most Russians
The Russian federal government has approved a package of bills designed to regulate cryptocurrency transactions and place them under strict state supervision.
Three pieces of legislation were approved at a Cabinet meeting in Moscow, according to a press release published Monday.
These are the draft laws “On Digital Currency and Digital Rights”, “On Amending Certain Legislative Laws”, and “On Amending the Administrative Offenses Code”.
The announcement stressed that the bills were “developed as part of an action plan to legalize certain sectors of the economy,” but media reports highlighted the restrictions being introduced.
While Russia is dramatically expanding access to digital assets to include even formally unqualified investors, it is severely limiting most people’s exposure.
Under the new rules, which will be approved by the summer, ordinary Russians will be allowed to obtain no more than 300,000 rubles in cryptocurrencies annually through a single intermediary.
The annual threshold, which equates to less than $3,700 at the current ruble-dollar exchange rate, was set in legal writing for the first time.
While the cap was first set months ago, recent statements from officials did not specify the amount, as cryptocurrency news outlet Bits.media noted.
After that, most Russians will be allowed to buy only the most liquid cryptocurrencies, Whitelist By the Bank of Russia, after passing a test to determine their awareness of risks.
Qualified and professional investors will also be tested, but will have no restrictions on their purchases and will be able to add almost any cryptocurrency to their wallet, with the exception of privacy-oriented coins.
Russia bans cryptocurrency transactions outside the regulated market
Provisions approved by the Russian government prohibit cryptocurrency transactions without the use of regulated intermediaries.
It offers a licensing system for such platforms, including cryptocurrency exchanges and depositories, existing stock exchanges and custodians.
Banks and brokers will be allowed to join the digital asset market as well but will be subject to special prudential requirements.
The legislation leaves the door open for some cryptocurrency operations outside the local market.
Russians will be able to buy digital currencies abroad, as long as they pay for the currencies from foreign accounts and transfer the purchased foreign currencies through local intermediaries.
In all these cases, Russian residents will have to notify the Federal Tax Service (FNS) of their foreign transactions, the Ministry of Finance confirmed in its statement. press release.
The draft laws impose various penalties on violators. For example, amendments to the Code of Administrative Offenses target regulators of trading platforms that do not meet the new requirements.
Meanwhile, the head of the Duma Committee on Financial Markets, Anatoly Aksakov, has indicated that Russians may be banned from using foreign exchanges altogether.
Speaking to Gazeta.ru, the high-ranking lawmaker confirmed that the legislation will be submitted to the lower house of parliament this week and highlighted:
“It is expected that trading in cryptocurrency instruments through foreign exchanges that do not work with Russian-licensed brokers will be prohibited.”
Aksakov stressed that trading in the next framework will be more secure than peer-to-peer transactions. He also insisted that the limit of three hundred thousand rubles was enough to allow the Russians to test the market without risking bankruptcy.
Quoted by the state newspaper Rossiyskaya Gazeta, Russian Prime Minister Mikhail Mishustin also stated that “the use of cryptocurrencies will become easier and safer” when citizens and businesses start buying and selling them domestically.
Critics have commented that by trying to regulate digital assets, Russia is effectively dropping an iron curtain over the cryptocurrency market, as happened recently. I mentioned By Cryptopolitan.
