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Bitcoin gives way to the ruble: Putin signs the law that prohibits crypto payments in Russia


Bitcoin gives way to the ruble: Putin signs the law that prohibits crypto payments in Russia

Bitcoin and other types of cryptocurrencies have just been banned in Russia by none other than the Commander-in-Chief himself.

A Russian Legislative Support System website said that on Saturday, Russian President Vladimir Putin approved legislation immediately banning the use of digital financial assets as payment in the country.

The mandate is the result of lengthy discussions between the Russian central bank and the government over cryptocurrencies. In addition, the action maintains the ruble as the only legal tender in the Russian Federation.

The Russian Assembly, known as the Duma, gave the green light to the measure last week. The restriction is in addition to a 2020 law that prohibited the use of cryptocurrencies for the payment of goods and services.

Russia places more importance on its legal tender than on cryptocurrencies. Image: Mint

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Ruble outperforms bitcoin in Russia

The law also allows the owners of platforms offering exchange services to block any transactions that facilitate the substitution of the ruble for digital financial assets.

The agreement also applies to public service digital rights (UDR). The new law will enter into force 10 days after its publication in a Russian government publication.

In the past, Russian officials have claimed that the DFA includes cryptocurrencies, while the UDR applies to a variety of digital assets. Russian parliamentarians will debate new legislation dubbed “On Digital Currency” this fall in a bid to close regulatory loopholes.

According to Russian law, cryptocurrency exchange operators are “subjects of the national payment system” and must comply with rules that, among other things, restrict the financial activities they can carry out and prohibit the delivery of products for leverage and return. to customers. .

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Strict compliance with the new law

By holding exchange operators and businesses accountable for violations, compliance will be enforced.

In January, the Bank of Russia proposed a complete moratorium on the use of cryptocurrencies for payments and investments.

The Russian Ministry of Finance submitted a draft cryptocurrency law to the government in February that, like today’s ordinance, allows investment in digital assets such as Bitcoin and Ethereum, but not their use to purchase goods.

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Bitcoin breaks the $20,000 level

At the time of writing, Bitcoin is trading at $20,629.90, down 5.7% over the past seven days, according to data provided by Coingecko on Saturday.

This year, Russia came under scrutiny for allegedly using cryptocurrencies to circumvent sanctions imposed after the country attacked Ukraine.

Anatoly Aksakov, head of Russia’s financial panel in the State Duma, revealed that a draft resolution to oversee cryptocurrencies will be introduced later this year.

Featured image from PiPa News, chart from TradingView.com

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