On July 31, the President of the Russian Federation signed the law “On digital financial assets”. This law prohibits the use of cryptocurrency to pay for goods and services in Russia. The new rules take effect on January 1, 2021.
The law defines digital currency as “a set of electronic data (digital code or designation) contained in an information system, which are offered and (or) can be accepted as a means of payment, which is not a monetary unit of the Russian Federation, a monetary unit of a foreign state and (or) an international monetary or unit of account, and (or) as an investment and in respect of which there is no person obligated to each owner of such electronic data ”. This concept is delimited from “digital financial assets”, which are digital rights, including monetary claims, the ability to exercise rights to equity securities, the right to participate in the capital of a non-public JSC, the right to demand the transfer of equity securities, which are enshrined in the decision on the issue of CFA. Their main difference is that in relation to the CFA there is an obligated person, and also the CFA is an object of civil rights and transactions of purchase and sale, exchange, pledge. At the same time, the purchase and sale, issue and accounting of CFA will be carried out in special information systems with operators and registries.
The law was adopted in a version that significantly differs from the previous one: the norms on administrative and criminal liability were excluded from the adopted version, the definition of digital currency became more general, which makes it possible to apply it, including to bitcoin, provisions were excluded that digital currency can be transferred only by inheritance, in bankruptcy or in enforcement proceedings.
The adopted version retains the ban on Russian residents from using digital currency when paying for goods, works and services, and also adds a ban on advertising settlements using digital currency. At the same time, digital currency is allowed to buy, mine, sell, and make other transactions. A condition for judicial protection of transactions with digital currency is its declaration.
The new law was adopted with the aim of introducing certainty into the regulation of new relations related to ownership, transactions and judicial protection of the CFA, however, it raises questions about the expediency of adopting a separate law. Relations on attracting investments using investment platforms have already been regulated by Federal Law No. 259-ФЗ dated 02.08.2019 "On attracting investments using investment platforms and on amending certain legislative acts of the Russian Federation". The only difference between investment platforms governed by these laws is the way digital monetary claims are accounted for, in or outside of a distributed ledger. Some norms from the legislation on the securities market were extended to the CFA without taking into account the peculiarities of this instrument in comparison with ordinary securities. In addition, the law does not allow the acquisition of digital assets for cryptocurrency, which will lead to the need for investors to perform a number of exchange operations to purchase digital assets issued within other information systems, and to additional transaction costs.