The big picture behind Russia’s draft law for crypto-regulations

ambcrypto.com:

It’s natural to be excited when a country announces it is working on a crypto-regulation law or even a draft law. However, crypto-lovers and investors need to pause and take a closer look before concluding that the development is a bullish sign for the industry.

With that, here’s what is going on in Russia.

A Russian government website reported that on 18 February, the Ministry of Finance submitted a draft law for the regulation of cryptocurrency to the Government of the Russian Federation.

However, the official release was quick to remind Russians that using crypto as a means of payment is still illegal. Rather, the draft law means to regulate crypto as an investment.

But, that’s not all. Some proposed regulations include bringing exchanges under the control of a centralized body, identifying all clients, and only allowing crypto withdrawals/deposits through a bank account. KYC will be vital for both exchanges and clients, while banks will also take part in crypto-compliance.

Furthermore, traders can’t just waltz into the industry. The draft law proposed a crypto knowledge and risk test for all potential investors. The results will reportedly decide how much money they will be allowed to invest.

A translation of the release stated,

“Upon successful completion of testing, citizens can invest in digital currencies up to 600 thousand rubles annually. If the test is not passed, then the maximum amount of investments will be limited to 50 thousand rubles. Qualified investors and legal entities will make transactions without restrictions.”

600,000 roubles meant around $7,656 while 50,000 roubles was worth around $638, at press time.

It was widely reported that Russia’s President Vladimir Putin is bullish on crypto and felt that Russia