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Russia adopting three-tier cryptocurrency regulation

Oct 15, 2019

Russia shows its readiness to embrace the crypto world since Russians are actively using cryptocurrencies in multiple ways. The three-tier approach to regulate digital currencies proposed by Russia’s Finance Ministry will see the light as early as on November 1st.

Russia’s customized approach will facilitate crypto handling for companies, traders, investors and other participants of the digital sphere. As the three-tier regulation provides separate rules for each type of crypto assets, it will be easier to clarify the right law and remain compliant.

Under the three-tier regulation, cryptocurrencies are differentiated as:

Virtual Assets - cryptocurrency that is used to transfer values (e.g. Bitcoin)

Technical Tokens – utility/technical tokens (e.g. Ethereum)

Digital Finance Assets - ICO tokens.

It worth noting that many public institutions and authorities have developed a negative attitude towards cryptocurrency. The inability to govern and control crypto assets was making those institutions really upset.

Being a conservative country with solid roots in a traditional economy, Russia nevertheless has chosen the progressive path by adopting crypto legislation instead of prohibiting digital currency. Although even the Central Bank of Russia perceives cryptocurrency as a threat to Russia’s monetary system, many financial institutions and politicians, including Vladimir Putin, supported the adoption of crypto laws.

Indeed, the crypto regulation would allow national authorities to have control over the digital assets industry. Many experts raise concerns about the anonymity issue and suppose that proposed crypto laws would reveal cryptocurrency owners’ identities.

At this point, Russia is about to introduce one of the most comprehensive cryptocurrency regulations in the world. Together with the evolution of the blockchain and cryptocurrency sphere, the country continues to develop new crypto-related regulations and it is very likely that soon we will see a series of newly-developed crypto-related laws.

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