Russia bans the use of cryptocurrencies and NFTs to pay for goods and services
Russian President Vladimir Putin today signed a bill banning the use of digital assets in the country, including cryptocurrencies and non-fungible tokens, to pay for goods and services.
The law, which came almost seven months after Russia’s central bank called for a ban on the use and extraction of cryptocurrencies, does not prohibit the possession of cryptocurrencies and digital assets, but limits how they are used. “It is prohibited to transfer or accept digital financial assets as a counterpart for the transferred goods, work performed, services provided, as well as another method that allows payment of goods (works, services) with the digital financial asset, except in cases provided by federal laws, ”the law states.
The call for a ban in January was argued on the grounds that digital assets pose a threat to the country’s financial stability and people’s well – being. “The breakthrough growth and market value of cryptocurrencies is primarily defined by speculative demand for future growth, which is creating bubbles,” the central bank said at the time. “Cryptocurrencies also have aspects of financial pyramids because their price growth is largely supported by the demand from new entrants to the market.”
It is not clear exactly how many people in Russia will be affected by the new ban. It does not mention the mining of cryptocurrency, which means that the law should not affect Russia’s mining community, the third largest in the world since April. The law also does not prohibit the possession or direct trading of cryptocurrencies, which means that it will have little effect on most people in Russia.
Russia has a strange history of cryptocurrencies, at times seeking to ban them, only to seemingly legalize them. In 2018, while Russian banks were planning cryptocurrency pilots, others in Russia gathered against them.
Further to Russia’s invasion of Ukraine in February, and attempts were made to get cryptocurrency exchanges to suspend accounts belonging to Russian citizens, a request that was rejected by leading exchanges. In April, the US Treasury Department sanctioned the Russian-owned cryptocurrency mining company Bitriver AG as part of an attack on companies and individuals avoiding sanctions against Russia.
