📌BTC to be Ban on Circulation: Starting from September 1, Russia will enforce strict restrictions on the general circulation of crypto assets such as Bitcoin. Only digital financial assets issued within its jurisdiction will be allowed.
📌 Exemptions: The bill will carve out exceptions for crypto miners and Central Bank-sponsored test projects within an experimental legal framework. This is because crypto mining significantly boosts Russia’s tax revenues.
According to the plans, the following entities will be exempt from the ban on Bitcoin and other cryptocurrencies:
1. Crypto miners: They will be allowed to continue their operations, as they generate significant tax revenue for the government.
2. Central Bank-sponsored test projects: Experimental projects approved by the Central Bank will be permitted to operate within a controlled legal framework.
3. Digital financial assets issued within Russia: Only cryptocurrencies and digital assets issued within Russia will be allowed for circulation.
These exemptions aim to balance the government's desire to control the financial system with the need to support innovation and revenue-generating activities. However, the specifics of the exemptions and how they will be implemented remain to be seen.
📌Rationale: Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, stated that the forthcoming legislation aims to restrict non-Russian crypto operations to reinforce the ruble’s dominance.
💥Russian Government View: The Russian government views cryptocurrencies as quasi-currencies that can easily be liquidated. However, some government officials have different views on the matter, championing a more inclusive approach to crypto regulation.
🚨Impact: The move may have a significant impact on cross-border transactions. Russian officials have occasionally used cryptocurrencies in the past for crucial military purchases. Crypto provides easy cross-border transactions with limited scrutiny from mainstream financial institutions, which are often inclined to take political sides in international politics.
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