New Russian law bans crypto payments for goods and services
Amidst internal conflict regarding the status of cryptocurrency in the country, Russian President Vladimir Putin signed into law a new bill Friday, “prohibiting the use of digital assets, such as cryptocurrency and NFTs, to pay for goods and services.”
The new law, Protocol reports, also requires crypto exchanges and providers to refuse transactions in which digital payment can be interpreted as a replacement for monetary exchanges. However, there is language in the final clause of the law that makes exceptions for certain payments.
What this law means for crypto holders in Russia is simple: you can still purchase cryptocurrency, but no vendor in the country will take your bitcoin in exchange for, say, groceries. Past speculation suggests that the country is cracking down on businesses that would potentially use cryptocurrency as a way to skirt sanctions imposed on Russia after its invasion of Ukraine. According to a New York Times article from February 23, shortly after the invasion began, crypto was likely being used “to bypass the control points that governments rely on — mainly transfers of money by banks — to block deal execution,” as sanctions began to take hold.
Crypto in Russia is already a contentious topic as many factions within the government debate whether to regulate or ban crypto. Protocol reported back in January on the government’s disagreement over what to do with cryptocurrency. The Central Bank of Russia called for a crypto ban, however, the Ministry of Finance opposed that stance, saying instead that the current regulation is sufficient and necessary to allow crypto technology to develop.
What the future holds for cryptocurrency in Russia is unclear as it stands, but for now, the new law will take effect on July 25.