Replies to post #29844 on Bitcoin (BTCUSD)

[tw0122]

Absolutely correct!

And next Russia will be treating Bitcoin as a currency. Russian citizens hold $66 billion in the cryptocurrency markets.



Russia Rejects Ban, Pushes Regulation Emphasizing Bitcoin Circulation

CONTRIBUTOR
Bitcoin Magazine
PUBLISHED
FEB 14, 2022 10:02AM EST

Landon Manning

Although Russia’s central bank and its ministry of finance had previously disagreed on the path for bitcoin inside the country, an agreement has been reached that is allowing crypto-friendly regulation to begin moving forward.

The dispute on Bitcoin regulation in Russia has taken on new development in January 2022, seeing two distinct factions emerge from inside the country’s establishment. Citing concerns of volatility and financial risk to ordinary citizens, the central bank has advocated a complete ban on the crypto asset, while the ministry of finance took an opposing view.

Not only would such a ban hurt regular citizens much more than any number of possible scams or financial crimes, it claimed, but it would also cut Russia off from the technological developments that the international cryptocurrency scene has been creating. In a January cabinet meeting, President Vladimir Putin called on these institutions to reach some sort of agreement quickly, acknowledging that the country has many “natural advantages” to crypto production.

However, with the knowledge that Russian citizens on the whole hold some $66 billion in the cryptocurrency market, it soon became clear that a legislative plan to completely eradicate this active community would be difficult to enforce. Therefore, it was only natural that the agreed-upon legislation treat bitcoin with relative amity, but the latest legislation that has been announced has exceeded expectations.
On February 8, a government website announced that an agreement on a new roadmap for legislation had been reached, publishing several key details, including several that are surprising in their leniency. Most crucially, a law was passed in 2020 declaring that bitcoin will be treated as a financial asset for taxation purposes, and this new plan will unambiguously treat bitcoin more like a foreign currency that is spent at many businesses. 

Claiming directly that, “The purpose of the regulation is to integrate the mechanism for the circulation of digital currencies into the financial system and ensure control over cash flows in the circuit of credit institutions,” the plan even goes so far as to demand that legally-operating exchanges in Russia have “financial airbags” to ensure liquidity and existing cash reserves, much like any number of traditional banks. Far from treating bitcoin as some outlandish stock option, the goal now is to “bring the digital currency industry out of the shadows and create the possibility of legal business activities.”

In addition to some of these measures that acknowledge bitcoin for what it is, a decentralized global currency, there are also several measures intended to offer ordinary users the maximum amount of protection, in the form of burdens that are assumed by exchanges and other platforms. Attempting to create a clear distinction between regulated and unregulated investors, the plan references a requirement that some of these crypto “investment opportunities” warn users of potential risks from engaging in unregulated markets. This statement ended with a list of various government institutions that took part in this agreement, including the aforementioned ministry and state bank, alongside a cadre of other financial, legal, taxation and internal government institutions. 

An article published that same day in Kommersant, a popular Russian daily newspaper, claimed that these changes are most likely to take effect in late 2022 or early 2023. It also affirmed a number of specific points, particularly the change from treating bitcoin as a type of financial instrument to a type of currency. Even as this economy must take place in an atmosphere of firm regulation, this plan has turned the old model of bitcoin treatment of Russia completely on its head. Instead of trying to stamp it out, it now looks like one of the world’s largest economies is set to embrace it wholeheartedly.