The bill sponsored by the finance ministry recognizes Bitcoin and other cryptocurrencies as investment vehicles instead of a payment option, FXStreet reports. Russians who want to own Bitcoin will be limited to purchasing the asset capped at $7,700 per year after undergoing rigorous Know Your Customer (KYC) procedures. The draft bill proposes that investors will be required to show their understanding of cryptocurrencies before purchasing their preferred assets. Residents will be limited to purchasing Bitcoin worth $650 per year if they fail the tests. Furthermore, the proposed law also outlaws the withdrawal of digital assets into self custody wallets. Therefore, investors will be required to manage their withdrawals and deposits through bank accounts.
Tussle to regulate crypto
The bill marks the end of a tussle between the country’s top financial sector agencies on coming up with a clear direction on digital assets. The ministry proposed the bill after President Vladimir Putin highlighted the importance of activities like Bitcoin mining. This is after Russia Chamber of Commerce chairman Sergey Katyrin called on the finance ministry to identify Bitcoin mining as a business opportunity instead of classifying it in the grey zone. Notably, the country’s central bank had proposed a complete bank of cryptocurrencies and related activities, citing a threat to financial stability. Following the central bank recommendation, the finance ministry and the State Duma began crafting the country’s roadmap to crypto regulation. The agencies resolved to propose the regulation after Putin urged the concerned bodies to agree on the way forward regarding crypto regulations. Russia’s focus on cryptocurrency regulations follows the increased adoption of various assets among the population in recent months. Despite the adoption, recent data shows that about 60% of Russians’ crypto wallets are in a “dormant” state. Since January 2021, Russians have been allowed to invest in cryptocurrencies like Bitcoin following a new law signed by Putin. However, the law did not limit the amount locals could spend on various assets.
