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Cryptocurrency regulations in Russia will now be in 3 tiers

Cryptocurrency regulations in Russia will now be in 3 tiers

Russian Finance Ministry has proposed new cryptocurrency regulations in Russia to classify cryptocurrencies under three separate legal categories. This marks another recent step by the Russian authorities to acknowledge and regulate the cryptocurrency market in the country.

The report of this classification proposal also mentions the increasing acceptance of the crypto market by the Russian authorities. As per Alexei Moissev, Russian Deputy Finance Minister, the legal classification of cryptocurrencies will be categorized into three types, namely ‘Virtual Assets,’ ‘Technical Tokens’ and ‘Digital Finance Assets.’

Cryptocurrency regulations in Russia to get comprehensive

Most countries where crypto is regulated also follow a similar-sounding categorization consisting of three categories. However, the Russian model is more codified and comprehensive.

The elements vital for network functioning are classified under the ‘Technical Tokens’ class. For example, Ethereum (ETH) can be counted as a technical token. The second category of ‘Virtual Assets’ represent those who act as a means to transact value, and notable examples include Litecoin (LTC) and Bitcoin (BTC). Under United States law, these cryptocurrencies are classified as commodities by the CFTC.

The third category, ‘Digital Financial Assets,’ is generally equated with securities. ICO tokens can be counted as digital financial assets since they have dividends and make money for the investor. These three levels will complete the crytpocurrency regulations in Russia.

Russian Finance Ministry to put forth proposal soon

The State Duma will likely be the first testing phase for these new cryptocurrency laws. Dubbed as ‘Federal law No. 419059-7’, this new proposed new ruling has the firm backing of Dmitry Medvedev, Russian Prime Minister who has set a November 1 deadline for the adoption of the bill.

It is worth mentioning here that there is no legal standing of cryptocurrencies so far in Russia. There are doubters in Russian Finance Ministry who say cryptocurrency regulations in Russia it would increase competition for the Ruble. It has to be mentioned here that debit cards based on cryptocurrencies are already legal in the country. However, Ruble must be linked to every cryptocurrency-related payment.

Russian is looking for ways to leverage cryptocurrencies as a probable alternative to the U.S. dollar. The legalization of cryptocurrencies is a step in the same direction.

Gurpreet Thind

Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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