Russian bill will not legalize payments in cryptocurrencies

The Committee of the Duma (Russian Parliament) was scheduled to hold today the first reading of the bill including amendments to the Civil Code, relating to cryptocurrencies. These amendments, while addressing several crucial points, will not make payments in cryptocurrency legal. The bill will be discussed in plenary next week.

It has been several months since Russia announced its growing interest in blockchain and cryptocurrency. Indeed, Vladimir Putin, recently re-elected Russian President, had already asked the central bank and the Russian government to provide an assessment of cryptocurrencies, including all the risks they entail. He also asked whether it was necessary to use new technological solutions in the banking sector. For Russian experts, cryptocurrencies are "promising" entities, which is worthy of inclusion in the legal arena.

Pavel Krasheninikov, head of the state's construction commission, said on Izvestia, the information portal of the Russian Ministry of Information Technology, that the bill entitled "Digital Law", backed by the commission the Duma, establish a legal basis for digital rights as well as for digital transactions.

According to the draft law, although digital currencies do not become a legal form of payment, it follows that, in the future, these currencies will be used as a means of payment in "controlled quantities". In the meantime, a separate law from the Ministry of Finance, the Ministry of Economic Development and the Russian Central Bank will establish the conditions under which such a payment can take place.

The bill also addresses the issue of digital consent. The digital confirmation of a user is identified as his written consent, serving as a means to sign a "smart contract". A transaction is considered complete after the signature and can only be contested if there is interference by a third party in the operation of the computer program. The bill also legalizes the processing and collection of large amounts of information.

"The bill does not address all the directives of the president, but it presents the conditions for greater regulation of the digital currency industry" [...] "Because cryptocurrencies and tokens are currently outside from the legal arena, they can be used to pay bribes, withdraw funds from bankruptcy, pay wages to the black "[...]" If cryptocurrencies are not legalized in one form or another, Russia will miss the opportunity to withdraw from the shadows and consolidate a number of serious financial flows on its territory "Igor Sudets, director of the educational program" Blockade for Lawyers "of the Russian Economic University of Plekhanov.

Yelena Tsaturyan, Legal Counsel for KSC Groups, said that cryptocurrency regulation should be a positive development. In Japan, cryptocurrencies have received a certain legal status as a payment instrument, while the European Union has recognized bitcoin as currency for tax purposes. She added that Russia can not ignore the legal status of cryptocurrencies. For her, it is a "contradictory situation" where the state does not recognize bitcoin, but where income from digital exchange transactions are taxed. She said "digital currency should be put into circulation".