The executive arm of Russia has approved a new limit on the purchase of digital assets by its citizens. The new limit comes amid the government announcing new legislation that legalizes crypto investments and trading. The new rules also limit the assets that non-professional investors can purchase to only the most liquid digital assets approved by the central bank.
The federal government of Russia has approved a package of bills designed to regulate cryptocurrency transactions and place them under strict state control. Three pieces of legislation have been greenlit at a meeting of the Cabinet of Ministers in Moscow, according to a press release published Monday. These are the draft laws “On Digital Currency and Digital Rights,” “On Amending Certain Legislative Acts,” and “On Amending the Code on Administrative Offenses.”
Russia announces limit on crypto purchases
The announcement emphasized that the bills have been “developed as part of an action plan to ‘legalize’ certain sectors of the economy,” but media reports highlighted the restrictions they are introducing. While significantly expanding access to digital assets to officially include even non-qualified investors, Russia is severely limiting exposure for most people. Under the new rules, which will be passed by the summer, ordinary Russians will be permitted to acquire no more than 300,000 rubles’ worth of crypto a year through a single intermediary.
The annual threshold, equal to less than $3,700 at the ruble’s current exchange rate with the dollar, has been fixed in legal writing for the first time. While the cap was first pitched months ago, recent statements by officials did not specify the amount, as noted by the crypto news outlet Bits.media. Then, most Russians will be allowed to buy only the most liquid cryptocurrencies, whitelisted by the Bank of Russia, after passing a test to determine their awareness of the risks.
Qualified, professional investors will undergo testing, too, but they will have no limit on their purchases and will be able to add almost any digital currency to their portfolio, except privacy-oriented coins. The provisions approved by the Russian government prohibit cryptocurrency transactions without using regulated intermediaries. They introduce a licensing regime for such platforms, including crypto exchanges and depositories, existing stock exchanges, and trustees.
Banks and brokers will be authorized to join the digital assets market as well, but will be subjected to special prudential requirements. The legislation leaves the door open for some cryptocurrency operations outside the framework of the domestic market. Russians will be able to purchase digital currencies abroad, as long as they pay for the coins from foreign accounts and transfer foreign currency purchased through local intermediaries.
In all these cases, Russian residents will have to notify the Federal Tax Service (FNS) of their foreign transactions, the Ministry of Finance underscored in its press release. The bills introduce various penalties for violators. For example, amendments to the Code of Administrative Offenses target the organizers of trading platforms that don’t meet the new requirements. However, critics have commented that the move is an attempt to stifle digital assets in Russia.
