The Bank of Russia, Moscow's financial authority, wants those who use cryptocurrency against the law to be held responsible. The financial regulator has proposed introducing legal liability for certain operations with digital asset transactions that it considers to be illegal.
The Russian Central Bank is attempting to prevent the circulation of decentralised currencies.
Cryptocurrencies and related activities in the Russian Federation are only partially regulated, owing to the statute "On Digital Financial Assets," which went into effect at the start of this year. One question that remains unanswered is whether digital money can be used to purchase goods and services.
The Central Bank of Russia (CBR) has consistently resisted enabling bitcoin and other cryptocurrencies to be accepted as payment methods. According to the authority, they are all "money surrogates" that are prohibited under existing Russian law, which recognises the ruble as the only legal cash in the 11-time zone country.
The CBR now seeks to impose legal culpability for "illegal circulation of digital financial assets," as it sees it. Surprisingly, the drive is part of the bank's goals for "creating an enabling environment for the introduction of new technologies and supporting financial market innovation" - two of the bank's primary "strategic directions" under the banner of "promoting digitalization."
The proposal has found its place in the Bank of Russia's "Main Directions for Financial Market Development of the Russian Federation" programme document for the period up to 2024. The project's Board of Directors recently accepted it for submission to the State Duma, the Federal Assembly's lower house.
The CBR says, a series of federal legislation aimed at comprehensive legal control of digital financial assets and utilitarian digital rights must be established in order to build innovative financial instruments. According to the central bank, another issue that needs to be addressed is the taxation of transactions involving these rights and assets, for which a mechanism should be established.
The Bank of Russia also mentions that work on launching a digital form of the national money is still ongoing. The monetary authority points out that the introduction of the ruble's third form, after cash and bank money, necessitates a series of legal adjustments. Anatoly Aksakov, the head of the parliamentary Financial Market Committee, said earlier this month that deputies in the Duma are working on amending 13 Russian laws and codes to accommodate the CBDC.
Members of the House, however, have expressed fears that the digital ruble might endanger the financial sector and information security. Simultaneously, Bank of Russia Chair Elvira Nabiullina recently indicated that the new currency is exactly what the Russian people require, as it would provide an alternative to cryptocurrencies and stablecoins while allowing for inexpensive and reliable payments.
The CBR began considering issuing a CBDC in 2018 and decided to investigate the possibility last year. In October 2020, the authority presented a consultation document, and in April 2021, the authority released a digital ruble idea. The authority organised a pilot group comprising around a dozen banks in June of this year. The platform's prototype will be finished in December, and trials will begin in January 2022.