Russia legalizes cryptocurrency, sets rules for transaction limits

• The government issued draft mentioned that there are 12 million crypto accounts with $26.7 billion worth of cryptocurrency

• Transactions of over $8,000 would be declared illegal 

Russia has become the latest country to join the list of nations that have legalized the usage of cryptocurrency as a viable form of currency.

The eleventh-largest economy stated on its official website setting the principles for the regulation of cryptocurrencies, backed by the Russian central bank.

The statement mentioned that of the 144 million people residing in Russia, residents own over 12 million cryptocurrency accounts and about 2 trillion rubles ($26.7 billion) worth of crypto. 

A draft law will be prepared before February 18, to regulate the circulation of digital currencies in the Russian Federation. The law will recognize cryptocurrencies as an analog of currencies, and not a digital financial asset.

Cryptocurrencies’ circulation in the legal sector will be possible only with full identification through the banking system or licensed intermediaries.

Read more: Crypto market shed $350 billion on weekend, weighed down by rate hikes, inflation

Crypto transactions of over 600,000 rubles (roughly $8,000) would be declared illegal and considered a criminal offense. Fines will also be levied on those who illegally accept crypto as a means of payment.

Crypto clash

Despite the latest report, mentioning the central bank’s support for the government's decision, a few weeks ago, the former submitted a scathing report on cryptocurrencies.

The report called cryptocurrencies a threat to Russia's financial stability and rife with fraud. It suggested banning cryptocurrency trading and mining in Russia, and instead bringing about the digital ruble, which is the central bank digital currency(CBDC) in the works by the Bank of Russia. 

Also read: Crypto crime hits record high of $14 billion in 2021, mostly due to DeFi scams and thefts

The regulator also called for issuing digital assets inside the country by licensed companies.

Picture Credits: CoinGape

Inputs from CoinDesk