Russia has made a significant leap in legalizing and regulating cryptocurrencies as President Vladimir Putin signed a new law recognizing Bitcoin and other cryptocurrencies as legal assets. This law, set to take effect on January 1, 2025, provides a clear legal framework for cryptocurrency-related activities and positions Russia to optimize its role in the digital financial sector.
Under the law, cryptocurrencies are classified as assets, and transactions involving them will not be subject to value-added tax (VAT). However, income generated from activities such as cryptocurrency mining and trading will be subject to personal income tax at a rate of 13% or 15%, depending on annual income levels. This reflects Russia’s efforts to promote transparency and enhance regulation in this sector.
Another noteworthy aspect of the legislation is the ban on domestic cryptocurrency transactions, while allowing their use in cross-border transactions without taxation. This policy appears to aim at enabling domestic entities to access global markets, particularly in light of sanctions imposed by Western nations.
Additionally, the law mandates cryptocurrency infrastructure operators to adhere to strict tax reporting regulations. Non-compliance will result in severe penalties, emphasizing the government’s commitment to robust oversight.
This move is seen as a strategic step to bolster Russia’s competitiveness in the cryptocurrency space while ensuring tighter and more effective management. As the law comes into force, it will create new opportunities and present challenges for advancing the development of digital finance in Russia.
By formally recognizing cryptocurrencies as legal assets, Russia has positioned itself at the forefront of the global shift toward digital financial systems, balancing innovation with regulation to secure its place in this evolving landscape.