Russia to ban Bitcoin as a payment method

by Peter .

Russia has finally updated its law for crypts to one that is much more flexible than previous drafts. However, it basically prohibits the use of Bitcoin as a means of payment. Bitcoin becomes unusable on the territory?

After having come a long way, Russia has passed a bill that legally recognizes crypto currencies as Bitcoin, but prohibits their use to purchase goods or services.

Russia takes an anti-Bitcoin stance

Bitcoin legal but useless in Russia
On 22nd July the local news agency Regnum reported that the State Duma, Russia’s legislative body, approved a draft law entitled „On Digital Financial Assets“ (DFA) on its third and final reading on 21st July.

This new bill recognizes digital currency „as a set of electronic data that can be accepted as a means of payment“ and gives it legal status.

In this sense, as of January 1, 2021, all operations related to cryptomonies will be legalized. However, not everything could be so wonderful.

Even though Russia granted legal status to cryptomonies, Bitcoin Rush and the rest will not be able to be used as a means of payment. This is undoubtedly a hard blow since this is what they are designed to do.

But then the question is: If I can’t use Bitcoin and the rest of the crypto currencies as a means of payment, what can they be used for?

Well, the DFA bill states that crypto currencies „can be issued, bought, sold and registered within the framework of special information systems.

In this line of thought, „the systems and their operators must comply with Russian laws and will remain on file in a relevant register maintained by the Bank of Russia,“ the statement said.

In addition, it should also be noted that the current law does not contain a definition of „token“ and „mining“. However, it does provide a definition of digital currency.

Also, although this bill provides a basis for cryptomoney legislation in Russia, regulation of the industry will be part of a completely different bill.

Anatoly Aksakov, told RIA Novosti that more detailed regulations could be approved during the next parliamentary session in the fall.

Threats in Russia over demand for USD 870,000 in Bitcoin

Why is it more flexible?
We pointed out earlier that, despite prohibiting the use of Bitcoin and other crypts as a payment method, it turns out to be a much more flexible bill than expected.

The reason is that, previously, the country’s legislators introduced a version of the law that basically made crypts completely illegal in the country.

In this sense, any company issuing or marketing crypts using Russian-based infrastructure would be illegal.

It also proposed fines of up to $7,000 or seven years in prison for people who buy Bitcoin with cash.

Clearly, this bill generated discontent within the crypto community in Russia. There were even protests in the country and criticism from various branches of government.