Crypto to be Considered Property in Russia
There are many different attitudes or perceptions about cryptocurrencies all over the world and the reasons why people buy them are different as well. Sometimes it depends on the country regulations you are living in. The situation might change when people will have a general idea about what cryptocurrency is, until that the usage and demand on them will still remain volatile.
Some countries have a positive welcome toward crypto, while some of them are strictly forbidding it. However, most of the countries have imposed regulations on it and the article will review the crypto industry in Russia.
Crypto Background in Russia
Due to the strict centralized system in Russia technological advancement is really high, as it always had the ambition to be the superpower in the international arena. First, it started with the competition in space and continuing with the implementation of blockchain technology, as they also prioritize the technical education of their citizens.
According to one of the investors, twenty percent of the top 50 blockchain projects were found in Russia. We can boldly say that the Russian economy, compared to blockchain projects and its profitableness, is struggling.
But there is always a but. Blockchain revolution in Russia could mean bad things for the Russian government, major banks, oil oligopolies, and other major institutions. The role that blockchain technology should have played in Russian society was controversial from the very beginning. One time they even were considering imposing punishment for those who were owning Bitcoins. This is why many investors and entrepreneurs were forced to leave the country and operate from abroad.
Several years ago, Vladimir Putin’s attitude toward cryptocurrencies changed because he saw the need to improve the country’s digital economy. He announced that Russia should support and welcome cryptocurrency. Some people think that this decision was made in order for the government to control cryptocurrencies and blockchain technology as well. Shortly after this announcement, the central bank started to crackdown on the cryptocurrency, saying it was used by criminals to launder money. One more reason is the increase of crypto gambling as it has promoted online casinos in the country.
Gambling and wagering is super popular in Russia. There are plenty of casinos and bookmaker companies. This means more tax money in favor of the government. Here’s where crypto gambling sites become the least desired tech innovation for authorities. As it’s unable to track crypto transactions, the government can’t control the income of casinos, or have information on where the money generated in the country goes. This by itself means less tax money flowing into the national budget, which is a more than enough reason for Russian government to regulate cryptos and make it’s owners declare about their assets.
Russia is making the crypto industry regulated
Unlike its previous restriction, this new regulation still applies to the use of crypto as a monetary currency. This regulation was expected to become official in 2021, but before that it was controlling buy and selling of the currencies because of its affiliation towards criminals. As we have seen above, the Russian government’s attitude towards crypto was changing from years to years, but general public opinion was so steady that many of them even left the country because of the strict restrictions and to start their trading or investment process in a welcoming environment.
New Bill Defines Cryptocurrency, Proposes Tax Regulations
On 1 December 2020 Russian government introduced a new law to the State Duma. At the demand and the exchange rate of these cryptocurrencies were high, the government saw the need to define the digital coins. On February 17, 2021, Duma had the first read of the suggested bill, which includes:
- To recognize cryptocurrency as a property for purposes of taxation.
- Anyone with the number of digital coins exceeding $8,184 will have to declare receipts. Fine will be 10% of the undeclared amount.
- This change in the tax law does not mean that crypto assets will be considered legal means of payment.
Conclusion
Finally, to sum up, it is not surprising that the country is trying to settle the rules and regulations on the crypto exchange, as we have seen it is the main practice all over the world. Russia is not an exception in this case too, as they started easing the regulations on cryptocurrency. We can say that it is a little bit unexpected from a country like Russia, where the top blockchain projects are operated, to restrict the crypto exchange. As they saw that people were not intimidated by their restrictions and increased demand on the digital currency made the government think about defining it as a property. It is a very interesting process to observe since the law is undergoing the reading process in the State Duma. The decision might change the reality of cryptocurrency, as the Russian market will be big and open.