Putin Signs Bill Outlawing Cryptocurrency Payments in Russia

Putin-Signs-Bill-Outlawing-Cryptocurrency-Payments-in-Russia
  • Russian President Vladimir Putin signed a bill that bans the use of digital financial assets.
  • Russians will not be allowed to use digital assets to pay for goods and services.
  • Digital asset exchanges will have a given time to comply with the new law.

According to Russian business media outlet RBC, Russian President Vladimir Putin signed a bill that bans the use of digital financial assets (DFA) such as Bitcoin and digital utility rights (DPR) as a method of payment in Russia. After being published in the government’s gazette, the legislation will go into effect 10 days later.

The bill was first presented to the State Duma, Russia’s lower house of parliament, in January. It defines digital assets as “other property used in the circulation of digital financial assets, including crypto-assets, tokens, and air miles.”

Under the new law, Russians will not be allowed to use digital assets to pay for goods and services. In addition, the bill prohibits the issuance of digital financial assets and the creation of platforms to trade them.

There have been talks that sanctioned Russian firms or individuals may use cryptocurrency to avoid the consequences of Russia’s invasion of Ukraine. However, officials have shown their skills in using on-chain analytics to trace transactions, and industry experts have warned that sanctions evaders would be ill-advised to utilize cryptocurrencies. U.S. and EU bodies have even added specific crypto wallet addresses to sanction lists.

Digital asset exchanges will have a speculated period to comply with the new law, and individuals will have six months to cash out their holdings. After that, any digital assets remaining in Russia will be subject to confiscation.

Earlier due to the Russia-Ukraine invasion, the Department of Commerce successfully implemented sanctions. Majority of the exchanges have so far complied with US sanctions, freezing the accounts of persons in the sanction list. For instance, Binance has just closed a handful of accounts of people with family ties to top Russian officials.

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