October 26, 2020

Distance from Bitcoin: we explain why Russia does not want to introduce the term “cryptocurrency” into the legal field

In the new version of the draft law “On Digital Financial Assets” (“On CFA”), lawmakers changed their interpretation the term "digital asset", essentially veiling under it the characteristics of the token. The latter along with the “cryptocurrency” is not directly mentioned in the document.

Also in the text there is a new concept“Digital currencies”, including foreign currencies, the issue and use of which will be prohibited in officially authorized systems. Indirectly, one can understand classic cryptocurrencies, but the vagueness of the wording is unlikely to add clarity to the already gray legislative field of the crypto industry in the Russian Federation.

ForkLog asked experts about whatrelated is the desire of lawmakers to get away from the specific generally accepted terminology of the cryptocurrency market and whether, as a result, the Russians will be allowed to conduct operations with bitcoin.

The subject of cryptocurrency regulation is obviouslygives the authorities a huge inconvenience, believes Alexei Kirienko, managing partner of EXANTE. According to him, this is indicated by the number of transfers of consideration of the draft law “On CFA”.

“The bill looks crude, and the wording iscause confusion. For example, CFA is a very broad concept. There are already established terms in the world - utility and security tokens. Sooner or later, everyone will come to these definitions, and there’s no need to reinvent them, ” - the expert argues.

The authorities can be driven by the desire to distance oneself as much as possible from the already issued cryptocurrencies and tokens, agrees Dmitry Zakharov, director of the Blockchain Lawyers continuing education program.

“Russia is far from resolving traditionalcryptocurrencies such as bitcoin and tokens issued as a result of ICO / IEO procedures already carried out. To avoid speculation on this subject, the legislator introduces new terminology, " He suggests.

In the new edition of the bill, the mostthe term digital currency is noteworthy. As Tomashevskaya & Partners, IP / IT practice adviser, Roman Yankovsky, member of the Commission for Legal Support of the Digital Economy of the Moscow branch of the Russian Bar Association, explained to ForkLog:

  • digital currency does not give any claim rights, including claim security rights, like stablecoins;
  • it is not approved by the Bank of Russia (otherwise it becomes a digital operating symbol);
  • digital currency is not the currency of another state.

“If these three criteria are met, then we getprohibited digital currency. Such, for example, will be considered bitcoin. Security tokens and stablecoins are regarded by lawmakers as a digital financial asset, utility tokens as utilitarian digital law, the Russian national “cryptocurrency” and the conditional “Libra” from Russian banks as digital operational signs, ” - explained Yankovsky.

It is possible that the Russian government plans to create its own crypto-exchanges, like in China or the USA, which, however, should not violate the hegemony of the Central Bank, continues Alexei Kirienko.

“As a result, officials are between Scylla andCharybdou: on the one hand, they must put forward a bill that does not create the feeling of a total ban, and on the other, listen to the Central Bank, which protects its currency monopoly, ” He explained in a comment to ForkLog.

Given the general negative attitude towards cryptocurrencies by the Central Bank, the expert believes that legal trading in digital currencies is unlikely to become a reality in the near future.

Recall the draft law “On CFA” for the second yearundergoing amendments in preparation for the second reading. The day before, the Chairman of the State Duma Committee on the Financial Market, Anatoly Aksakov, expressed hope that the bill could be adopted before the end of 2019.

However, a member of the Council forthe development of the digital economy under the Federation Council Nadezhda Surova. In her opinion, the lack of consensus between representatives of various blockchain companies postpones the adoption of the law for at least a year.