The Russian cryptocurrency market is going to see a dramatic change, as the nation’s lawmakers are ready to issue new regulations. Top-level officials are working to finalize the new laws, which will classify crypto assets into three different categories. So, the concept of digital assets will be totally different in the country.

Under the new cryptocurrency law, the three tiers are ‘Virtual Assets’, ‘Technical Tokens’, and ‘Digital Finance Assets’. Prime Minister Dmitry Medvedev instructed to pass the bill within 1 November.

The new regulation will add a new dimension in the crypto market

Russians are already familiar with digital currencies and use those for different purposes, including online shopping and investments. As there was no legal framework for the crypto market, authorities could not trace the movements of digital assets inside the country. This lack of regulation created an overall negative impression of the use of cryptocurrencies among common folks and government organizations.

Although Russia has been providing active support to the blockchain technology from the beginning, some policymakers were sceptical when it comes to adopting digital coins. Central Bank of Russia is among the strong entities hostile to crypto-assets and they opposed the integration of digital currencies to the public monetary system.

In contrast, several other banks and government officials including the President himself, have repeatedly pushed for crypto regulations. Having crypto regulations in place would allow the authorities to exercise control over transactions, as well as add to the GDP through taxes. This also makes sure nobody uses the money illegally including violation of anti-money laundering laws.

At the beginning of this year, Vladimir Putin was asking the government to put Russia on a more regulated cryptocurrency scene. The regulators appeared to be a little late in crafting the laws, but they ultimately came up with the most comprehensive set of crypto regulations. This will likely bring confidence among cryptocurrency users and boost the market significantly.

A perfect set of laws

Several countries practice cryptocurrency regulation similar to the three-tier system being developed in Russia. But Russian lawmakers intend to launch clearer laws so that individual traders and companies can operate smoothly. Cryptocurrencies that allow users to transfer values will be categorized as ‘Virtual Assets’. 

However, Ether could be classified as a ‘Technical Token’ as the entire Ethereum network relies on it to work. ICO tokens are different in that they provide dividends and other features. These will fall under the third category- ‘Digital Finance Assets’. The purpose of categorizing digital assets is to apply different laws according to their individual properties and how they operate in the market.

This way, legislators will be able to craft customized rules for each type of digital asset. It will also reduce the risk associated with assuming the appropriate law to apply for digital coins. At the end of the day, traders and companies will enjoy more convenience in investing digital assets and showing transactions to the authorities.

The readiness of the country to adopt cryptocurrency at full-scale

Russia, one of the economic superpowers, is always on the search for new ways to accelerate its economy. It is thus obvious that they will try to exploit new technologies for financial gain. As expected, the number of blockchain projects in the country is increasing day by day. Individual traders and private companies are encouraged to study blockchain and use them in appropriate areas.

Both end-users and authorities are feeling the need for comprehensive and clear laws. While the Russian cryptocurrency atmosphere is not governed by specific laws right now, crypto-related activity is not negligible here. Several instruments including cryptocurrency debit cards are allowed in the country, provided that the users show their full income and pay taxes for it.

A number of laws are being considered to cover blockchain-based projects including digital rights, smart contracts, and crowdfunding.

However, there is no chance that cryptocurrencies might replace the national fiat- the Ruble. But other running fiat currencies could be substituted with crypto. Russian crypto market will certainly flourish if the new regulations are put into effect. The country may see this as an opportunity to bypass US sanctions and expand its orb of influence.