- The Finance Ministry in Russia has tabled draft legislation that proposes certain limits to cryptocurrency investments based on financial literacy tests.
- Other propositions by the Ministry include taxing crypto mining, legalizing crypto as investment instruments, and full KYC to transact crypto.
The Ministry of Finance in Russia has reportedly presented a bill on cryptocurrency regulation in the country. The draft legislation seeks enhanced protection of digital asset investors through various ways, including the placement of a limit on annual crypto investments.
Historically, the nation’s Finance Ministry has been in favor of crypto legalization and regulation, rather than what the Bank of Russia has previously championed – an absolute ban. Its latest bill now seeks to have cryptocurrencies recognized as an investment instrument, but prohibited as a payment method.
Additionally, the legislation, should it get approved, would impose further security requirements on crypto investors. Anyone who wants to make a crypto transaction would need to provide their full customer identification. Russia Minister of Finance, Anton Siluanov, proposed a similar move earlier this month, saying banks should be able to provide crypto services.
Finance ministry cryptocurrency bill requirements
Even more, the lawmakers want licenses issued to foreign crypto exchanges as a permit to operate on Russian soil. These trading platforms would also be required to provide their Russian clients with financial literacy tests. The latter will become criteria, determining how much individuals are permitted to invest in cryptocurrencies. Those who pass the test will be able to allocate up to 600,000 rubles ($7,806) annually to digital currency investments. On the other hand, a limit of 50,000 rubles ($650) will be imposed on those who fail.
The Ministry showcases its support for crypto mining in Russia but says that the endeavor should be taxed. The nation’s President, Vladimir Putin, has previously agreed to crypto mining in the country, saying Russia holds a “competitive advantage” due to its cheap electricity prices. Already, Russia is a significant contributor to Bitcoin mining, with 11.2 percent of the global hash rate. Only the US and Kazakhstan have outdone it.
Crypto as currency or investment instrument?
Earlier this month, the government and the Bank of Russia jointly released a draft law that now contradicts that of the Finance Ministry. The former wants to equate cryptocurrencies to the nation’s ruble, rather than classifying them as financial assets. The latter, just like the nation’s Finance Minister, wants crypto investments treated similarly to investing in precious metals.
Essentially, investing in Bitcoin per Minister Siluanov should be like investing in gold, per a statement he made earlier this month. The former has been called “digital gold” since it mimics gold but has the added advantage of being digital. Bitcoin proponents and gold bugs continue their long-time rant, with each providing reasons why their preferred asset of choice is superior to the other.
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