Russian Authorities Clarify that Cryptocurrencies May Be “Contractual Means” of Conducting Payments

The State Duma has recently acknowledged that amendments to the Civil Code (in Russia) that cryptocurrencies (or “digital monetary units”) may be considered “a contractual means” of conducting payments in the country, according to Pavel Krasheninnikov, Chairperson of the Duma Committee on Legislation, at the St. Petersburg Legal Forum.

Krasheninnikov stated:

“We believe that it is necessary to make amendments to the Civil Code, now we are in the process of an appropriate approval procedure, but there is an understanding that so far they have called it so – digital monetary units, it is, of course, not a legal means of payment, but this means of payment is quite possible , can be contractual, as a contractual means of payment.”

Krasheninnikov clarified that even though virtual currency isn’t a legal means of payment in Russia, the officials making amendments to the Civil Code think that it may be used “within the framework of contractual law and be of a contractual nature.”

Virtual currencies are “planned to be attributed not to securities, but to property,” Krasheninnikov explained while adding that they think “this is property.”

As noted in a release from Russian State officials:

“Under international law, legal tender is a means that must be accepted for payment in any store, and a contractual means of payment is accepted by agreement of the parties to the contract.”

Russian authorities further noted:

“Earlier, the Bank of Russia objected to the use of cryptocurrency as a means of payment in Russia, even only by agreement of the parties. At the same time, the regulator’s annual report submitted to the State Duma in early May said that within the framework of the regulatory ‘sandbox’, they tested the work of seven services, three of them were devoted to the digital currency market. Thus, the Central Bank tested a service for collective mining of digital currencies, a payment service using digital currency and a service for investing in digital currency.”

Anatoly Aksakov, the Chairperson of the Duma Committee on the Financial Market, said that the definition of virtual currency, as “prescribed in the law on digital financial assets” has to be clarified and the “whole variety of digital currencies – cryptocurrencies, stablecoins, the digital ruble of the Central Bank – must be specified.”

The announcement further explained:

“In the Russian law on digital currency, digital currency is a set of electronic data (digital code or designation) contained in an information system. This data can be accepted or offered as a means of payment, which should not be the currency of Russia or a foreign state. At the same time, Russian companies and residents are not entitled to accept digital currency as a means of payment for services and goods.”

Despite these restrictions, amendments to the Russian Administrative Code, which may add certain responsibility for this particular violation, have not been submitted to the State Duma. The Ministry of Finance said there’s an administrative fine in “the amount of 20 to 200 thousand rubles for illegal acceptance of digital currency as payment (counter grant).”

According to the Findustrial Consulting Group‘s definition (which was shared at the coordination council of the Russian Union of Industrialists and Entrepreneurs), the Russian approach to “legal regulation in the field of blockchain allows the issuance and circulation of tokens in Russia (digital rights in accordance with Article 141.1 of the Civil Code), security tokens (part 2 of Art. 1 of the CFA Law), stablecoins (part 6 of Art. 1 of the CFA Law) and utility tokens (Art 8 of the Crowdfunding Law).”

The announcement also noted that the “release and circulation of cryptocurrency in Russia is prohibited (part 3 of article 1 of the law on the CFA), while there is no prohibition on its purchase on foreign platforms.”

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