coindesk.com
Russia’s State Duma passed legislation establishing the country’s first comprehensive framework for regulating cryptocurrencies with most of the new rules set to take effect on Sept. 1.
The law creates a legal framework for crypto exchanges, depositories and other digital asset providers, while setting rules for who can buy crypto and under what conditions, Russia’s state-owned news agency TASS reported Tuesday.
Only organizations included in a special registry will be permitted to operate as cryptocurrency exchanges, although firms will be allowed to continue operating without registration until July 1, 2027.
Under the new law, banks will be required to refuse transfers if they suspect an unauthorized entity is operating a cryptocurrency exchange.
The legislation also guarantees judicial protection for holders of digital currencies regardless of whether the assets were previously declared.
Retail investors will be allowed to buy the most liquid cryptocurrencies through licensed intermediaries, subject to an annual limit equivalent to roughly $3,800 per intermediary. Qualified investors will be able to purchase any crypto without restrictions.
Russia’s central bank had laid out the proposed framework in December that would legalize and regulate cryptocurrency trading for both individuals and institutions. The new law also follows the deployment of the European Union’s (EU) most significant sanctions package against Russia in April, which specifically targets crypto. It includes a complete ban on providers and platforms established in that country.
“Russia is becoming increasingly reliant on cryptocurrencies for international transactions,” the EU said.
Russia’s new digital assets law oversees crypto mining activities, issuance and circulation of cryptocurrencies and the services provided by brokers, asset managers, trading platforms and clearing houses.
The law does not lift Russia’s longstanding prohibition on the use of crypto for payments of goods and services within the country. It also bans banks and others from advertising and promoting crypto payments.
However, it preserves several exceptions, including allowing digital currencies to be used for settlements under foreign trade contracts between Russian residents and non-residents, transactions involving mined cryptocurrency, payments required by digital asset platforms and settlements involving securities or other digital assets.