The upcoming bill on Digital Financial Assets will ban cryptocurrency issuing and trading across the territory of the Russian Federation.
The head of the legal department at Bank of Russia, Alexey Guznov, revealed in his interview with the Russian news agency Interfax, that the central bank is against institutions for organizing the production of cryptocurrency in Russia. He said:
We believe that there are great risks in legalizing the circulation of cryptocurrency, both in terms of financial stability and the system of combating money laundering, and in terms of protecting consumer rights.
The unjustified risk
According to Guznov, the Bank is currently approaching a consensus in the discussion with the market participants, that no one will be forbidden from holding digital assets as they are not drugs or weapons. If citizens, who own a virtual currency complete transactions in a jurisdiction that does not prohibit this, the institutions are unlikely to be able to limit their actions.
Since the upcoming bill will prohibit almost everything about cryptocurrency except holding, it will outlaw institutions that make cryptocurrency trading and usage. According to the official, the legalization of issuance and circulation of cryptos is an unjustified risk and institutions will introduce penalties for violating this law.
From the point of view of the functioning of the financial system and the consumer protection system, the legalization of the issuance and most importantly, the organization of the cryptocurrency circulation, is an unjustified risk. Therefore, the bill directly formulates a ban on the issue, as well as on the organization of the circulation of cryptocurrency, and introduces liability for violation of this ban.
The bill on Digital Financial Assets
The latest statement about the bill of Russia’s Digital Financial Assets (CFA) came after many updates and delays in providing clarity to the regulation of digital assets.
The bill on CFA was adopted almost two years ago when president Vladimir Putin urged the government to go for more regulated crypto industry. However, the bill has not yet been passed.
While Russia’s Ministry of Finance has been attempting to legalize virtual currencies in the country, the central bank has been fighting to ban the legal use of cryptocurrencies.
A. Guznov noted that the Bank of Russia would like the bill to be adopted as soon as possible. The bill might finally get passed during this spring session of the parliament after the sensitive dilemma of retroactivity of the law will be solved.
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