Russian law to criminalize the use of Bitcoin or cryptocurrencies as money surrogate

Russian President, Vladimir Putin in his recent press release signaled that regulations for cryptocurrency must be formulated and implemented across the country by July 1st. He has also named the regulatory package as Digital Assets Regulation Bill, which had its appearance last year.

The Finance Ministry announced:

“to legislatively prohibit the use of cryptocurrency as a surrogate for payments in the territory of Russia”

Based on this press release, Russian Ministry of Finance is drafting a law which shall criminalize the use of cryptocurrency as a substitute for money. When the Digital Assets Regulation Bill was passed, the use of cryptocurrency was opposed by the Bank of Russia and the Finance Ministry and also cited that the payments for goods and services shall be done only using Rubles.

The Russian Ministry proposed to criminalize the turnover of money surrogates including cryptocurrencies. This news was officially released by Deputy Finance Minister, Alexei Moiseev during his visit to the conference held by Vnesheconombank.

Alexei Moissev also stated:

“The ministry assumes serious responsibility, right up to criminal ones, for arranging schemes, issuing money substitutes and receiving them…This concerns the payments in cryptocurrency.”

He also added that the responsibility of arranging schemes, issuing substitutes for money and receiving them are upon the ministry which includes the concerns involving payments in cryptocurrency. He also made the fact clear that Money Surrogate Bill is not exclusively for prohibiting cryptocurrencies, rather, it is solely for improving the use of only Russian Ruble for goods and services.

Another supporting fact is the prohibition for Monetary Surrogates.

Though this year seems to have got many positive developments for cryptocurrencies among the policymakers, the Ministry of Finance and the Bank of Russia have never changed their stand on using cryptocurrency as money surrogates. This was evident from the statement made by Deputy FM Alexei Moiseev that ‘everything else other than Ruble is a surrogate’.

He also added that Russia accepts Bitcoin use services instantly to convert cryptocurrencies into Rubles. He confirmed that such operations shall not be closed. The draft has been given such an attention in establishing Ruble as the single legal means of payment in Russia.

The Ministry concluded by stating:

“This is necessary to protect the ruble as the single legal [means of] payment in Russia”

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