Russian Finance Ministry Says Cryptocurrencies Are “Digital Financial Assets”, but Not Money

Russian Finance Ministry Drafts New Crypto Bill

The Russian Finance Ministry has crafted a new cryptocurrency bill that classifies cryptos as “digital financial assets”. The proposed bill refers to cryptocurrencies as electronic securities, which are derived using programmed cryptographic algorithms. According to the official document, the legal title of ownership is established by keeping a digital record on a public distributed ledger, referred to as blockchain. Notably, the bill states that cryptocurrencies are not money, because they may not be used as a legal mode of payment. This seems to be consistent with what was stated previously by Elvira Nabiullina, a prominent economist and chairperson of Russia’s central bank.

The new Russian crypto bill does consider cryptocurrencies to be tokens. This is where it gets more confusing because the crypto-community equates tokens to digital money that can be used to fund the launch of crypto-related startups. In fact, it’s possible to trade tokens on most cryptocurrency exchanges in somewhat the same way that you’d trade traditional stocks. However, trading tokens and/or cryptocurrencies has lead to a lot of speculation, which has contributed greatly to the extremely volatile nature of the crypto-market.

Russian Government’s Plans to Regulate Its Crypto-Market

Anti Danilevski, founder and CEO of KickICO, an initiative launched by crowdfunding experts partly with the intention to eliminate scams in the crowdfunding domain, believes that Russia’s new crypto bill is designed to help the country’s crypto investors. He thinks that the bill will be helpful because it sets up clear guidelines for how they can legally be used, and is not meant to place any unnecessary restrictions on investors and traders.

It seems that the Russian authorities have begun to retract some of the statements they issued a few years back. For instance, in 2014, Russia’s Finance Ministry introduced a bill regarding electronic money that considered it to be “quasi-money”. This has lead people to assume that bitcoin would be treated somewhat like money since bitcoin can be thought of as electronic money. However, the new bill and the older ones seem to be syntactically and semantically ambiguous. This is because they’re using terms such as “tokens” and “electronic money” to refer to things which might mean something different to the larger crypto-world.

Russia’s Cryptocurrency Bills Seem Ambiguous

For example, electronic money can just as well be interpreted as fiat currency sitting in your online bank account that you can transfer anywhere. To assume that the term “electronic money” refers to bitcoin or other cryptocurrencies might not be accurate, depending on what the Russian finance ministry would like to convey. Furthermore, the new bill discusses tokens, calls cryptos “financial digital assets”, yet doesn’t consider them to be money.

Russia’s finance ministry might have to clarify its stance regarding cryptos a bit more so that everyone can better understand what exactly their bill entails. A few things that are clear right now, according to the bill, are that people who aren’t properly qualified as investors will still be allowed to invest in crypto as long as their investment is not more than 50,000 Roubles ($900). There’ll also be restrictions placed on the type of wallets and accounts they can use.

Furthermore, crypto-mining in Russia will only be legally permissible if it’s done through a registered company, or by an individual who officially declares his occupation as a self-employed miner. Given these new developments from Russia’s regulatory bodies, it appears that the world’s largest country is actively researching and learning about cryptocurrencies. Hopefully, the nation’s governing organizations can act responsibly and assist in the healthy growth of the nation’s crypto-economy.