Russia’s ‘Digital Law’ Bill Will Not Legalize Crypto Payments, Putin Orders

Reports from Izvestia, the news portal of the Ministry of Information Technologies have stated that the Russian State Duma Committee on State Construction which was supposed to be held today regarding the first hearing of amendments to the country’s civil code relating to cryptocurrency, is not expected to legalize cryptocurrency payments.

The bill, which was going to receive the support of the State Duma Committee on State Construction, will create a legal foundation for crypto rights and crypto transactions, explained Pavel Krasheninnikov, Head of the State Construction Committee.

For the time being, experts view cryptocurrency as a “promising” entity, making it substantial in including it in the country’s legal system.

Krasheninnikov and Vyacheslav Volodin, the State Duma Speaker received amendments in March.

The central bank and the government had earlier on received orders from President Vladimir Putin to provide an evaluation of cryptocurrency, including all the threats involved and whether it is worth it to adopt new technological solutions in banking.

Officials are of the opinion that the law will get rid of the potential risk of crypto objects being used to place assets in an uncontrolled environment, by which profits of crime can be legalized.

According to the draft, cryptocurrency users can remain unguarded on the basis of inadequate laws.

Even though cryptocurrency payment will not be legalized, according to the bill in the future, cryptocurrencies will be used as payment “in controlled quantities.” During that period, a different law by the Ministry of Finance, the Ministry of Economic Development and the Central Bank will determine the conditions by which payment will happen.

The bill deliberates crypto confirmation of an identified user as his written consent, acting as a way of signing a “smart contract.” A transaction is only deemed complete after signing and can only be contested if a third party prying into the computer program’s operation.

The bill additionally legalizes processing and collecting large amounts of data.

It has been recommended that the State Duma’s legal department to makes use of the concepts “cryptocurrency” and “token” in place of “digital money” and “digital law,” according to terms that are used in practice.

The bill does not give full detail of the president’s orders, however, it puts forward conditions for additional regulation of the cryptocurrency industry, noted Igor Sudets, director of the Plekhanov Russian Economic University’s “Blockade for Lawyers” educational program.

According to Sudets, given the fact that cryptocurrencies and tokens are presently outside the legal system, they are being used for corrupt practices, withdrawing funds from bankruptcy, paying “black” salaries.

Experts believe that if Russia fails to legalize cryptocurrency, it will miss the chance to get away from the shadows and encounter a series of financial flows on its territory.