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Bitcoin Gives Way To Ruble: Putin Signs Law Banning Crypto Payments In Russia

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Bitcoin and other types of crypto has just been outlawed in Russia by no less than the commander in chief himself.

A Russian legislative support system website said that on Saturday, Russian President Vladimir Putin approved a legislation setting immediate prohibitions on the use of digital financial assets as a payment method in the country.

The mandate is the result of lengthy discussions between the Russian central bank and the government on cryptocurrencies. In addition, the action maintains the ruble as the sole 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 statute that banned the use of cryptocurrencies as payment for goods and services.

Russia is giving more premium on its legal currency, than crypto. Image: Mint

Ruble Beats Bitcoin In Russia

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

The regulation also applies to utilitarian digital rights (UDRs). The new law will go into force 10 days after its publication in a Russian government publication.

In the past, Russian officials have claimed that DFAs include cryptocurrencies whereas UDR applies to a variety of digital assets. New legislation dubbed “On Digital Currency” will be debated by Russian MPs this fall in an effort to fill regulatory loopholes.

According to Russian legislation, crypto exchange operators are “subjects of the national payment system” and must adhere to rules that, among other things, restrict the financial activities they are permitted to conduct and prohibit the delivery of leverage and yield products to the consumers.

Suggested Reading | Shanghai Targets $52 Billion Metaverse Tech Economy By 2025

Strict Compliance To The New Law

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

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

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

BTC total market cap at $396 billion on the weekend chart | Source: TradingView.com

Suggested Reading | Indian Regulator Gets Rid Of Its Only Crypto Exchange Body – Bane Or Boon?

Bitcoin Breaches $20,000 Level

As of this writing, Bitcoin is trading at $20,629.90, a decrease of 5.7% over the last seven days, according to data provided by Coingecko on Saturday.

This year, Russia has been scrutinized for allegedly using cryptocurrency to dodge sanctions imposed after the country attacked Ukraine.

Anatoly Aksakov, the chief of Russia’s financial panel in Duma, disclosed that a draft resolution to oversee cryptocurrencies would be introduced later in the year.

Featured image from PiPa News, chart from TradingView.com

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