Using crypto as a means of payment will result in stiff fines for Russian citizens and companies, according to new legislation put forward by financial authorities in Moscow.
The monetary penalty is not the only punishment for challenging the ruble’s status as the single legal tender in Russia, with the sponsors also seeking to seize the coins spent by offenders.
Russian bill aims to ban Bitcoin payments through fines and confiscation
A draft law prepared by financial regulators in Russia introduces liability for those who pay with cryptocurrencies in the country. The legislation imposes hefty fines that can reach 1 million Russian rubles (over $12,000) for the owners of the digital assets.
The bill, prepared jointly by the Central Bank of Russia (CBR) and the Ministry of Finance (Minfin), has been submitted to the State Duma, the lower house of parliament, the Russian crypto news outlet Bits.media reported, quoting the business information portal Expert.ru late on Tuesday.
According to the document, private individuals using cryptocurrencies in payments will be fined between 100,000 and 200,000 rubles, while companies breaking the law will have to cough up between 700,000 and 1 million rubles.
The penalties will be introduced through amendments to the Code of Administrative Offenses, Director of Bank of Russia’s Legal Department Andrey Medvedev unveiled during an international legal forum in St. Petersburg, Russia’s second-largest city.
“The liability (for using digital currency as a means of payment) is quite strict against the general background of the code,” the CBR official admitted and went on to drop another bombshell:
“But the key thing is that the digital currency that was used illegally as a payment will be confiscated, this will be the most painful phenomenon.”
In April, the Russian government approved legislative changes that will legalize the state seizure of cryptocurrency by recognizing it as property in criminal proceedings. The texts are ready for review in the Duma, Deputy Minister of Justice Vadim Fedorov announced this week.
Bank of Russia remains a staunch opponent to permitting crypto payments
Andrey Medvedev then emphasized that Russia’s monetary authority maintains its long-standing position that using digital currencies for payment inside the country is “inadmissible.”
He reminded that this is per the Russian law “On Digital Financial Assets” and insisted it is an “indisputable truth” that the Central Bank of Russia “will defend with all its might.”
Medvedev highlighted that the new provisions of the Code of Administrative Offenses will “strengthen the prohibitive norm of the law.”
At the same time, the legal commentator pointed out that, “digital currencies can and should be used” in foreign economic activity, “given the urgency of the moment.”
The CBR executive was referring to Russia’s attempts to employ cryptocurrencies in cross-border settlements with trading partners amid financial restrictions imposed on the country as part of Western sanctions over its invasion of neighboring Ukraine.
In March, the Russian central bank proposed the establishment of an “experimental legal regime” (ELR) that would permit Russian companies to exchange and spend digital coins in foreign trade and a limited number of “highly qualified” investors to put money into crypto assets.
At the time, the CBR said:
“Bank of Russia still does not consider cryptocurrency as a means of payment, therefore it proposes to simultaneously introduce a ban on settlements between residents on transactions with cryptocurrency outside the ELR, as well as to establish liability for violating the ban.”
Then, in early April, its governor, Elvira Nabiullina, reiterated the need to strengthen liability for the use of cryptocurrencies in settlements within the country. She also reminded that the central bank is ready to allow cryptocurrency investments for some market participants.
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