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Ban on the use of crypto for payments in Russia

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HIGHLIGHTS :

  • There has been an ongoing debate about crypto between the Russian government and the Central Bank.
  • Crypto exchanges and firms will ensure compliance with this law
  • Bitcoin mining is being promoted in Russia.

There has been an ongoing debate about crypto between the Russian government and the Central Bank

Strictness is being done in some countries regarding the crypto segment. Russian President Vladimir Putin has signed a law banning the use of digital assets for payments. Under the new law, digital assets and digital rights cannot be accepted as payments for goods and services.

With this, it has been clarified that the ruble has been officially accepted as a currency in Russia. There has been an ongoing debate between the Russian government and the Central Bank regarding cryptocurrencies. The law, published on the Russian parliament’s website, states “Prohibits the transfer or acceptance of digital assets for the purpose of payment for goods transferred, works performed, services or other means.”

Crypto exchanges and firms will ensure compliance with this law

Compliance with this law will be ensured by crypto exchanges and firms associated with this segment. The Russian government can directly acquire financial assets without involving exchanges. Securities that are guaranteed digital assets can also be legally canceled without prior notice to the asset holders.

Earlier this year the Bank of Russia proposed a complete ban on crypto for payments or investments. However, Russia’s finance ministry then submitted draft regulations for cryptocurrencies to the government, which allowed investments in cryptocurrencies such as bitcoin but could not be used to buy things.

Bitcoin mining is being promoted in Russia.

Faced with worldwide condemnation after the attack on Ukraine, Putin showed enthusiasm for bitcoin mining. He said that Russia has advantages such as electricity surplus and availability of trained people for this. To avoid sanctions imposed by Western countries, Russia has decided to speed up the trial of the digital ruble. The digital ruble was earlier planned to be launched in 2024 but is now set to be introduced next year. The trial of the digital ruble will begin with the use of smart contracts with real clients.

Smart contracts are computer programs written in code that allows automatic compliance without intermediaries of terms agreed upon between parties.

The Russian government can directly acquire financial assets without involving exchanges. Securities that are guaranteed digital assets can also be legally canceled without prior notice to the asset holders

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