Russian President, Vladimir Putin, signs Crypto ban into law

[TL;DR]

🔷 On July 16, the Russian government announced a ban on cryptocurrency activities within the nation.

🔷 Although the Russian President had shown interest in the idea of digital currencies, he has now turned around to banning them.


In a new law signed on July 16, Russian President Vladimir Putin effectively banned using digital assets as payments for goods and services. As a result, Russia is no longer accepting cryptocurrencies or NFTs as legal payment methods. These assets, however, can still be sold, bought, exchanged, and pledged.


Early hope for cryptocurrency

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In 2015, Putin referred to Bitcoin as something that "could not be dismissed" even though it was unbacked. Many crypto-optimists interpreted this as a sign that Russia had accepted digital assets.

Two years later, the Russian leader had grown weary of cryptocurrencies by saying that they posed "serious risks" as he sought regulatory reforms. During the same year, he issued five decrees concerning cryptocurrencies, including rules regarding initial coin offerings.


The present reality

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Since Russia invaded Ukraine, it has been in the limelight for its crypto activities. Therefore, major crypto companies like Binance and Coinbase have committed to complying with U.S. or European restrictions on Russian users.

In January, the Russian President, Vladimir Putin, spoke enthusiastically about the prospect of mining Bitcoins, stating that Russia had "certain competitive advantages" such as a surplus of electricity and well-trained workers to mine the currency.

A national ban on the use of digital assets for payments was, however, signed into law by Russian President Vladimir Putin on July 16. With the new law, digital assets and rights cannot be accepted as payment for goods and services since they are no longer considered "monetary surrogates." In addition, other monetary units are also banned, reaffirming the ruble's position as Russia's only officially recognized currency.


Official Release by Russian Parliament

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According to the release by the Russian parliament's website, the law states, "It is prohibited to transfer or accept digital financial assets as a consideration for transferred goods, performed works, rendered services, as well as in any other way that allows one to assume payment for goods (works, services) by a digital financial asset, except as otherwise provided by federal laws."

An accountability system will ensure that exchange operators and businesses are liable for violations. As per Russian law, operators of these kinds are considered "subjects of the national payment system" and are subject to regulations that, among other things, restrict the kinds of transactions they can perform and forbid the provision of leveraged products to their clients.

It is now possible for the Russian state to directly acquire financial assets without the involvement or consent of exchanges. Additionally, digital assets can be terminated without notice to owners of the securities backing them.


Conclusion

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Following the news development, the market appeared to be slightly fearful as Bitcoin and other cryptocurrencies saw a decline. But the market has rapidly taken a new weekly high as Bitcoin approaches and consolidates around the $22, 000 region according to data from coinmarketcap.



Author: Gate.io Observer: M. Olatunji
* This article represents only the views of the observers and does not constitute any investment suggestions.
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