Russian Central Bank Plans to Legalize & Tax Bitcoin as Digital Commodity
At last, the Russian government and its central bank have decided to regulate and legalize bitcoin within the country.
While the timeframe of the Russian government’s imposition of regulatory frameworks for bitcoin users, businesses and investors remains unclear, Bloomberg BNA reported that the Russian government announced its plans to recognize bitcoin as a digital good and commodity.
At the May 25 parliament meeting, the Central Bank of Russia’s deputy chairman Olga Skorobogatova stated that the bank’s first set of regulations for bitcoin will be submitted to the State Duma, the lower house of the Federal Assembly of Russia, within the next month.
Previously, Skorobogatova spoke at a meeting for the Review of the Central Bank’s Annual Report for 2016 in the State Duma in regard to the rising popularity of and demand toward digital currencies such as bitcoin. She told legislators that the use of digital currencies must be regulated and taxed appropriately to ensure that trading and activities aren’t facilitated in unregulated over-the-counter (OTC) markets.
“[Digital currencies] should be regulated, because volumes are increasing compared to the previous year. If people are engaged in this, they have to pay money for it, and we have to have a clear understanding of how to control this activity,” said Skorobogatova.
She further emphasized the potential impact of bitcoin on Russia’s finance sector, if the demand toward the digital currency continues to rise nationwide. Skorobogatova explained that increased usage of bitcoin could result in instability in Russian financial markets, without the implementation of proper and efficient regulatory frameworks and policies for bitcoin trading, bitcoin businesses and usage.
“Since virtual money is being emitted, which is not provided with a gold reserve or controlled in terms of their quantity, sooner or later it can lead to instability in financial markets,” she added.
According to Semen Kaploushenko, chief customer officer at KUNA Bitcoin Agency, governments including the Russian government are starting to recognize the important role bitcoin is playing as an alternative financial network to the global monetary system and banking infrastructure. Bitcoin is providing a platform wherein anyone can send and receive money to and from one another without the existence of intermediaries.
As bitcoin and other digital currencies such as Ethereum continue to demonstrate an exponential growth in terms of market cap and user base, governments are beginning to feel the urgency and necessity to regulate the cryptocurrency markets.
“As more and more people are using bitcoins, most [governments] find it necessary to control this process, or at least set up a model for their legal use and taxation,” said in an interview.
Recently, the Australian government officially eliminated double taxation on bitcoin after seeing its bitcoin and digital currency markets struggle to grow like other regions such as Hong Kong, Singapore, South Korea and Japan.
The implementation of harsh taxation policies on bitcoin and digital currencies in Russia could also result in a difficult ecosystem for both companies and investors.