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Markets News

Russian lawmakers approve legal status for cryptocurrencies, but ban use as payment

MOSCOW, July 22 (Reuters) - Russian lawmakers passed a bill on Wednesday to give cryptocurrencies legal status, but banned them from being used as a means of payment.

The lower house of parliament, also known as the Duma, approved the bill on digital financial assets in a third and final reading.

Anatoly Aksakov, who heads the Russian Banking Association and a financial committee within the Duma, said an agreed position on what a cryptocurrency was had now been defined in law.

“Essentially the cryptocurrency is a complex of digital data, a digital code or a reference, that is stored in the information system,” Aksakov said as he explained the law to Duma members.

The bill will now go to the upper house of parliament and then to the Kremlin, though these last two steps are generally considered a formality.

In its comments on the new bill following an earlier reading on Tuesday, the central bank said: “The draft law introduces the definition of a digital currency, which cannot be a means of payment.”

“Possession of digital currency, its acquisition and transfer by legal means are allowed only if declared.”

On their introduction Russian authorities declared cryptocurrencies, such as bitcoin, illegal on the grounds that they could be used in money laundering or to finance terrorism.

Russia changed its position in 2018 and promised to regulate the cryptocurrency market, but this regulation had since been delayed. (Reporting by Elena Fabrichnaya; Writing by Andrey Ostroukh; Editing by Jan Harvey)

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