Russia Proposes Tax Code Changes; Digital Financial Assets to be Classified as Property

The prime minister of Russia, Mikhail Mishustin, has said that the government is considering categorizing digital financial assets (DFA) as a form of property. Mikhail, who was speaking at a recent Russian government session, noted that the authorities intend to forge a path for a civilized local crypto market. According to a transcript of the meeting, Mikhail acknowledged the growing interest in this emerging asset class, hence the need for advanced oversight informed by law.

Other than supporting the growing crypto industry, Mikhail’s legal propositions are set to protect consumers as well. In fact, the Russian prime minister was keen to highlight that the propositions will help DFA owners to safeguard their rights and interest with a guarantee of proper legal frameworks. He also added that taking such a direction will make it difficult for ‘shadow schemes’ to thrive within the Russian market.

Mikhail’s general sentiment was to amend the tax code to include the legal propositions that would recognize DFA’s as property,

“Let’s make a number of changes to the Tax Code so digital financial assets can be recognized as property, and their owners will be able to count on legal protection in the event of any illegal actions, as well as to defend their property rights in court.”

The prime minister who was appointed earlier this year has been vocal about prioritizing a digital economy’s growth. Previously, Mikhail was the lead of Russia’s tax agency, having to be at the helm for around a decade. His newly appointed role as the head of government comes when crypto assets are a major and unavoidable topic for most developed economies.

Notably, Russia has not been among the most crypto-friendly jurisdictions according to the latest oversight developments that target the operation of crypto assets. Back in September, the Ministry of Finance proposed to criminalize the non-disclosure of crypto accounts. The country is set to enforce its digital asset bill in January 2021, having being signed into law by President Putin.

Oversight Still Ambiguous

While the latest sentiments by Mikhail seem quite bearish for crypto fundamentals, an expert who spoke to Decrypt was of a contrary opinion. Artyom Tolkachev, the CEO of Tokenomica, said that Mikhail’s take had not brought anything new to the table. He mentioned that tax code amendment to feature DFA’s had already been announced some time back. Also, crypto-assets supposedly do not fall within the DFA category,

“It is important to understand that cryptocurrencies are not ‘digital financial assets.’ By their nature, DFAs are more like security tokens, so it is a bit strange that they were considered side by side at a government meeting.”

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Author: Edwin Munyui

$127 Billion of Gold Discovery Brings Elation in Bitcoin Community

A huge amount of gold reserves has been discovered in Russia that has elated the bitcoin community.

The largest gold producer of Russia, Polyus PJSC, said its untapped Sukhoi Log deposit in Siberia holds the world’s biggest reserves — 40 million ounces of proven reserves with an average gold content of 2.3 grams per ton.

“The estimate of the reserves is an important milestone in development of the field,” said Chief Executive Officer Pavel Grachev in an interview in Moscow. The field may allow the company to boost its annual output by at least 70%, reportedly.

The audit showed that a deposit of 67 million ounces of total resources is up from the previously estimated 63 million. The main investment in the project, however, won’t start until 2023.

“We want to show that a project of this quality and scale can and should be carried out, taking into account the best environmental standards, despite the hard-to-reach location,” Grachev said.

With Gold’s supply to increase, bitcoiners took this opportunity to point out how there will only ever be a limited 21 million BTC.

“$127 billion of gold randomly discovered. Friendly reminder that there are, and forever will be, 21 million bitcoin,” tweeted Lolli, a BTC rewards site.

Bitcoin proponent Anthony Pompliano also pointed out how “No one knows how much gold exists in the world & it is unlikely to be nearly as scarce as people previously thought.”

But according to Dan Tapiero, both gold and bitcoin should be part of investment portfolios. While Bitcoin price rallied 82% this year, gold also recorded returns of +25% YTD, making a new ATH in August as central governments pumped a vast amount of stimulus into economies to mitigate the damage from the coronavirus pandemic.

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Tapiero says people can front-run central banks and institutions by buying not only bitcoin but also gold, whose institutions’ allocation is still small.

“The funniest thing about bitcoiners is that they don’t realize that no one in the traditional money mgmt world gives a shyt about GOLD. Institutions have about a 1% allocation. It’s very early days for gold. It’s even earlier days for BTC,” he said.

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Author: AnTy

Bank of Russia Is Studying Pros & Cons of a Digital Ruble; May Start Developing CBDC In 2021

  • The Bank of Russia (BOR) is studying the possibility of launching its digital ruble.
  • BOR and the Ministry of Finance investigate the advantages and cons of adopting a national digital currency within Russia.
  • Can a digital ruble replace the use of the dollar in Russia?

According to Izvestia, a Russian finance news site, the Ministry of Finance and Bank of Russia investigate other nations’ efforts in releasing a central bank digital currency (CBDC). The post, published on Monday, highlights some of Russia’s advantages of launching its own digital ruble, including reducing the cost of transactions, more opportunities for cross-border payments, and ending dollarization in its economy hence reducing sanctions from other countries.

Despite the advantages of the digital ruble, the Ministry of Finance cautions on the problems a CBDC could bring along. Digital currencies have long been associated with high volatility risks, poor network security, and its use in promoting illicit activities.

The central bank aims to increase its efforts in launching a digital ruble. While the final decision is yet to be made, BOR plans for the digital ruble to follow FAFT recommendations on digital assets. The digital coin is set to boost the overall domestic economy by enhancing online payments – allowing offline use of the digital ruble if there’s no internet.

According to Anatoly Aksakov, head of the State Duma Committee on the financial market, the digital ruble may start to be built as early as 2021. Once the consultation period elapses, the digital ruble will be released in a pilot phase, with several citizens using it.

Read More: Russian Central Bank To Curb Total Digital Assets An ‘Unqualified’ Investor Can Acquire

Can a digital ruble help in de-dollarization?

The Russian government is working on finding a way around its economy’s dollarization – a digital ruble is expected to do so. The central bank explains that the token will help end corruption, reduce the costs associated with distributing physical cash, and help Russia avoid sanctions.

The bank did not clearly say how the digital ruble will end sanctions from other countries, with Plekhanov Denis Domashchenko, a PRUE lab research lead. G.V., stating it ‘may not be the solution to sanctions.’ According to him, the digital ruble’s launch has more to do with the private cryptocurrencies such as Bitcoin (BTC) circulating in the country rather than the dollar.

Russia has had a stern stand against the use and distribution of cryptocurrencies in the past. The digital ruble will not be any different from the regulator, stating that only the issued CBDC will be accepted as money across the country.

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Author: Lujan Odera

Russian Central Bank to Curb Total Digital Assets An ‘Unqualified’ Investor Can Acquire

The Bank of Russia seeks to regulate the total amount of digital assets that individual investors can buy. The central bank has published a draft of regulatory proposals highlighting how they will regulate the nation’s digital assets space.

The Russian central bank is now proposing a bill that will limit the number of digital assets held by non-qualified individual investors annually.

As per the proposal, the Bank of Russia states that non-qualified investors will not be permitted to acquire digital assets above 600,000 rubles or about $7,800. However, qualified investors will not have to adhere to this limit.

According to the regulator, the new limit will help in the recently approved crypto law’s operationalization, specifically on the digital financial assets.

To be deemed as a qualified investor, one must meet 1 of the following five criteria:

  • Hold an economics degree.
  • Own securities totaling more than $74,400
  • A net worth of 6 million rubles (~$74,400)
  • Have over two years of experience working for a financial organization
  • Trade significant amounts of securities regularly.

According to the publication, the curbing will apply to both digital financial assets and various digital rights. The statement reads:

“Individuals representing unqualified investors will have a limit on the amount of digital financial assets for annual purchase at a total of 600 thousand rubles.

The limit for the acquisition of digital rights for unqualified investors who hold both digital financial assets and other digital rights is set at 600 thousand rubles for digital financial assets and 600 thousand rubles for other digital rights.”

The Russian central bank is asking for feedback and opinions about the proposal from the public. Those willing to provide their input have until Oct. 27. The restriction is set to be enforced from Jan.1, 2021.

The Russian central bank also released a distinct proposal touching on how those willing to issue digital assets should register.

Notably, the new restrictions will apply to digital assets, which will be offered when the new digital assets law is enforced. Lawyer Mikhail Uspensky, who spoke to CoinDesk, stated, “Such tokens don’t exist yet, so the document is written for the future. The law will only come into force in January [2021], and cryptocurrencies are not mentioned in it at all.”

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Author: Joseph Kibe

Russia’s New Amendment On Crypto Laws Could See Bitcoin Miners Lose All Their Rewards

  • New reports from Russia confirm amendments in the country’s crypto laws that could ban Bitcoin (BTC) miners from receiving mining rewards.
  • The amendment is yet to be finalized, but experts argue if the law is passed, it could have a drastic impact on the overall use of crypto assets in the country.

As first reported by a Russian news outlet, Izvestia, the Ministry of Finance in Russia, is proposing an amendment to the federal law on digital financial assets (DFA) that could see Bitcoin miners receive no rewards on their efforts. According to the letter, the amendment allows Bitcoin mining using Russian infrastructure, but miners are not allowed to receive rewards in crypto.

The amendment further bans all transactions using virtual currencies in the country with three main exceptions. However, the amendment to DFA is yet to be finalized. The letter has been sent out for interdepartmental coordination and approval across different government departments.

A Closed Mining Cycle

The new amendment raises several questions on the implementation and wording of the document. As stated above, Bitcoin, Ethereum, and other crypto miners will be allowed to mine their tokens but will be stripped of its financial value as miners cannot receive BTC or ETH.

Several experts have since condemned the amendment as a “revenue loss” for the country, calling for revisions on the bill. Speaking on the issue, Dmitry Zakharov, CEO of Moscow Digital School, stated the “wording does not bode well for miners” as no other alternative has been offered on how to receive mining rewards. He added,

“Perhaps experts will try to come up with some interesting legal constructions, but all of them will be fraught with significant risks of bringing to administrative and criminal liability.”

If the amendment passes, then Russia could lose a share of its revenues, another expert on the matter said. According to Anton Babenko, partner of the Padva and Epstein law office, prohibiting receiving crypto could lead to more people not reporting their revenues, leading to tax losses.

A Leeway? Or Not?

Russia implemented a total crypto ban last year causing a public outcry that caused the parliament to shut down the ban. The latest amendments stipulate a similar ban – prohibiting any individuals, companies, or entrepreneurs from performing any transactions with virtual money. However, the amendments stipulate three exceptions to the rule – an inheritance of crypto assets, enforcement proceedings, and if a debtor goes bankrupt.

Any use of crypto in the country could lead to legal and criminal liability on the user with a 100 thousand rubles fine on individuals or five to seven years prison time and up to 1 million in fines for legal entities.

The new rules aim at tightening the use of cryptocurrencies in Russia in a bid to stop illicit items and illegal activities using Bitcoin and crypto in Russia. According to a law expert, the new amendment constitutes a “total ban on cryptocurrencies” which could have a severe impact on the countries crypto space.

The country’s policies on crypto could be a missed opportunity for the country, economist, Vladislav Ginko said earlier this month even as Russia extends its efforts in hoarding physical gold.

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Author: Lujan Odera

Russia Missing the ‘Unique’ Opportunity to Invest in BTC as it Focuses on Hoarding Gold

While on one side, Russia is regulating digital currencies, on the other hand, Roskomnadzor, a federal executive body responsible for overseeing the media, is banning the crypto, fiat, and e-currencies exchange monitoring website Bestchange.

While the site is blocked by RKN, Bestchange advises people to use the blocking bypass tools like VPN, mirror site, and extensions to access the site. Other crypto sites affected include ProstocCoin and CryptoRussia.

The step has been taken by RKN because these sites promote the use of other currencies besides the ruble in the country. This is because the money can only be issued by the Central Bank of the Russian Federation, and the introduction of other funds in the Russian Federation is not allowed, states the court document.

The court found these websites guilty of allowing the use of Bitcoin to purchase goods and services which violate Federal Laws. Besides the preventing financing of terrorist activities with Bitcoin, it also states the decentralized nature of bitcoin’s issuance eliminates the “possibility of its regulation.”

Amidst this anti-cryptocurrency move, economist Vladislav Ginko wrote that the country is missing the “unique” chance of stacking bitcoin as Russia focuses on gold hoarding with “the looming severe sanctions from the United States may provoke a cascade selling out of Russia’s debt.”

Ginkgo is a former vice-rector of Moscow-based Jewish University, currently an analyst and lecturer at Russia’s leading state think-tank, Presidential Academy.

He points out how some of Russia’s elite believe new sanctions are almost inevitable while the share of foreign investors plummeted from 34.9% in March this year to 29.8%. Russia’s central bank has also slashed the key rate to 4.25%.

In response, Russia’s state has become the biggest buyer of domestic produced gold. In August, Russia’s banking system accumulated 97.7 tons of gold, up 21% from one month earlier.

However, according to Ginko, the banks should invest in bitcoin instead, as some Russian elites also believe. Some of them reportedly bought BTC in January 2019 when BTC was around $3,500. He said,

“The current price of Bitcoin is not $500,000 yet, but $11,700, which means a 330% return for less than two years. Russia may miss an opportunity to catch a lucky ‘Bitcoin ticket’ to the future, and instead of it falls into the gold trap.”

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Author: AnTy

Wirecard Manager Hiding in Russia With A ‘Significant’ Amount of Bitcoin Stashed

Former Wirecard board member – Jan Marsalek, who has been in hiding for weeks, has fled to Russia with “significant” amounts of bitcoin stash, which he bought from Dubai where the company had dubious operations, according to a report by the German news outlet.

Marsalek had much interest in cryptocurrencies as earlier this month The Wall Street Journal noted:

“Mr. Marsalek liked engaging in late-night discussions about cryptocurrencies and their ability to move money without a trace.”

He is currently staying at a private house in the Moscow region under the supervision of the Russian military secret service GRU.

Last month, the head of Wirecard’s Dubia-based unit was arrested by the German prosecutors, and an arrest warrant was also issued for Masalek. But he escaped, leaving behind “a slew of false leads and clues as to whether he may be hiding,” including falsified immigrant records and airline bookings.

The company which operates crypto debit cards, filed for insolvency at the end of June after it was found to have $2.1 billion missing from the balance sheet.

This resulted in the crypto debit cards operated by the company getting frozen, and now crypto companies are looking for new partnerships.

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Author: AnTy

Russian Court Denies Appeal for $900K Compensation for Stolen Bitcoin; It’s Not Property

A victim of a kidnapping in Russia who lost $90,000 worth of Russian Rubles and 99.7 in stolen Bitcoin, appealed to the court almost two years ago, to force the kidnappers to return his stolen bitcoin worth about $900,000 when the crime was committed.

However, the judge ruled against the victim, citing Bitcoin is not a legal tender in the country and is not deemed as property and thus cannot be returned.

The judge ruled the kidnappers must return a portion of the stolen Russian Rubel and sentenced them to 7-10 years of prison. The court order denying the victim possession of his stolen bitcoin could still be challenged in a higher court.

Russian government and regulators have maintained a passive stance on crypto despite them trying to regulate it under current property laws. Despite the court orderings and several deadlines, the status of cryptocurrencies in Russia is still uncertain.

The latest draft bill titled “On Digital Financial Assets,” recommends stricter measures to curb the use of digital currencies. However, if the bill is approved, it would categorize Bitcoin as a property that the victim can use to claim his stolen bitcoins back.

While the country hasn’t taken any concrete steps to legalize the trading or use of crypto, Russia saw a massive boom in usage during the COVID-19 outbreak.

The lockdown imposed by almost all severely hit countries for a couple of months saw a complete restriction on accessing public services, including banks. This forced the public to look for alternatives.

Russia Not Keen on Having an Alternate Financial System

Most of the countries believe legalizing bitcoin would put their financial sovereignty at risk as people would start jumping ships to a newer form of currency. This is the reason many countries are reluctant to regulate bitcoin or cryptocurrencies, including Russia. Even those countries which have regulated it has made it legal only for trading and not to use as a tender.

The Russian Central Bank holds a similar view and believes bitcoin cannot be granted a legal tender status, however, many other Russian government agencies believe banning is not an option as it would create a black market outside the jurisdictions of the government and it could also impact the flourishing blockchain industry in the country.

The Ministry of Economic Development believes a ban on cryptocurrencies could force a nascent sector out of the country, which would then cause an adverse effect on its economy in the long term.

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Author: Rebecca Asseh

Russian Central Bank To Unveil Digital Mortgage Solution Supported by Blockchain Tech

  • The Bank of Russia is working on a digitized mortgage solution supported by domestic Enterprise Blockchain Masterchain.
  • The government seems to have embraced Blockchain Technology but is still hostile towards cryptocurrencies as they recently placed a ban on crypto activities in the country.

Reports have now emerged that the Russian Central Bank is well on course in developing an online Mortgage solution that is supported by blockchain technology. They are leveraging domestically produced Masterchain Blockchain.

In a May 28th online meeting, the First Deputy Chairperson of the Central Bank, Olga Skorobogatova revealed that the Central Bank was in the late stages of releasing a digitized mortgage solution on domestic Blockchain Tech. They had already conveyed copies to the Federal Registration Service and government pending approval. She reported that at least 9 banks and a depository had already onboarded the project on the Enterprise Blockchain Masterchain.

“…what we now they gave the proposal directly to the government and Rosreestr – this is to finalize the process so that the full cycle of digital mortgage operations is implemented on the Masterchain”

Notably, Masterchain launched in 2017 by Fintech Association affiliated with, boasts of being the first to receive accreditation from the financial watchdogs, Federal Security Service (FSB).

The Russian ministry in charge of the Economy has lodged a bill that will look to create a special framework under which Blockchain will be regulated. The bill, if it goes through the State Duma, will seek to enable testing of Blockchain in a special regulatory sandbox. The Blockchain projects would be aligned to 8 sectors: financial markets, government services, trade, healthcare, distance learning, transport, manufacturing to construction

Russia support for “blockchain not crypto”

The Russian government however has a very different stance with regard to crypto. They have recently imposed a crypto ban following an agreement between the Russian Central Bank and the FSB.

Just last week, Russian officials’, members of the State Duma (Russian Legislature) proposed fines amounting to 2 million Rubles ($28340 as per this writing) and up to 7 years’ imprisonment term for illegal issuance of cryptocurrencies and digital assets.

If the bill sails through it could be set to outlaw: crypto mining, crypto exchanges, trading, and extending to even fiat to crypto on-ramps. This will now see crypto firms move to other neighboring crypto-friendly jurisdictions.

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Author: Lujan Odera

Not Just Bitcoin, Oil Price War Brings Treasuries to a New Low While Stock Market Tumbles

  • Oil price falls to cost levels as OPEC and Russia starts an oil price war
  • Everybody buying Treasuries has its yield sinking to a new low of 0.4655%
  • Meanwhile, coronavirus cases mounting in America with the death toll rising globally
  • Gold hits 7-year high at $1,700 but bitcoin could move further lower

In yet another sudden drop in prices, Bitcoin tanked hard, going as low as $7,685 last week, a level last seen in early January. From a 2020 high of above $10,500 on Feb. 13, bitcoin has crashed nearly 27% in value.

At the time of writing, we were still below $8,000, trading at $7,808 while managing the daily trading volume of over $2 billion.

However, it’s not only the crypto market that is experiencing a bloodbath. Trader Crypto Squeeze points out,

“If you think Bitcoin is having a bad day, have a look at the crude oil price. It’s down by 30% today alone. And 54% since Jan 2020.”

Oil Price War Begins

After the past two weeks of severe sell-off in the stock market caused by the fear of the economic impact of coronavirus (covid-19), this weekend, the oil price war has the market tumbling.

OPEC and Russia have started an oil price war that according to Goldman Sachs Group, could push crude into $20s. Brent crude at a low of $20 a barrel will completely change the outlook for oil and gas markets, where some producers can operate.

“We believe the OPEC and Russia oil price war unequivocally started this weekend,” the Goldman Sachs’ analysts said.

“The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with the significant collapse in oil demand due to the coronavirus.”

Last week, OPEC and its allies failed to reach an agreement to extend the output cuts which started this war on already roiled prices of oil. Over the weekend, Saudi Arabia slashed its selling prices while planning to lift the output above 10 million barrels a day.

US 10y yield Crashes Below 0.5%

The safe haven asset Treasuries have been seeing increasing demand during this sell-off that has the yield tanking. Since the last two weeks, the yield on 10-year Treasuries has sunk to new lows which briefly went down to an all-time low of 0.4655%.

As a matter of fact, the entire curve is trading below 1%, for the first time in history. Markets are also pricing for the Federal Reserve to cut policy rates to 0% in the coming months.

This bond rally was also fueled by an all-out price war among the world’s largest crude producers.

“The market is panicking,” said Shinji Hiramatsu, a senior investment manager at Sompo Japan Nipponkoa Asset Management.

“Position adjustment, loss-cut buying and all sorts of buying are emerging. Everybody’s buying Treasuries.”

This bond rallying is “unchartered waters” that makes a global recession a probability now and not a possibility. Now, it has been speculated that the US central bank will deploy unconventional policies to combat global financial crisis as “there’s almost nothing left but renewed QE.”

Gold to New Highs, Bitcoin to the Downside

US stocks continue to tumble triggering exchange rules that limit decline at 5% as oil price war added to the backdrop of dread surrounding the deadly virus that has infected 108,000 people and killed over 3,700.

The spreading coronavirus had investors on edge for weeks, now the crude prices that are in free fall sees no market bottom soon.

Meanwhile, this is a good time for gold which according to trader Tone Vays doesn’t have any “resistance” keeping it from rising to new all-time highs. For the first time in 7 years, gold jumped to $1,700.

When it comes to bitcoin, though the outlook has turned bearish with the macros factors affecting the market, Vays keeps on to his extremely bearish outlook,

“all bearish targets are back on the table with a Weekly Red 2 under Red 1 while breaking short & intermediate Moving Averages on Weekly Charts. BTC has never fallen under 200 Week SMA.”

According to his 2020 outlook, the new lows are at sub $6,000 and if the price falls below $6,500, Vays sees bitcoin in the vicinity of $5k before halving in May 2020.

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Author: AnTy