Russia has at different times been hostile, insecure, or inconsistent with its stance on cryptocurrencies. In early August, reports claimed that Russian leader Vladimir Putin had signed a law legalizing digital assets like bitcoin. However, in recent weeks there have been proposals that seem to be aimed at limiting the use of cryptocurrencies in the country.
Now, Russia's central bank, Bank of Russia, is looking to put a cap on the amount of digital assets that non-professional investors can buy in a year. Under the proposal published by the Bank of Russia on October 13, unskilled retail investors will not be able to buy digital assets worth more than 600,000 Russian rubles (approximately $ 7,800) per year. However, qualified investors – for example, those with an economics degree and a net worth of more than 6 million rubles (or $ 74,500) – will not be expected to meet this limit.
In particular, the new limit will apply not only to digital financial assets, but also to other digital rights. This new restriction will take effect on January 1, 2021, along with the enactment of Russia's first crypto-centric law. Meanwhile, the nation's central bank is accepting proposals from the public on the proposal from October 13 to October 27.
Russia's complicated relationship with Bitcoin
It is no secret that Russia has had a difficult relationship with Bitcoin. While some analysts believe that the country, which is one of the most important crypto markets in the world, will be among the first to implement a full regulatory framework for cryptocurrencies, this is not the case yet. In fact, it appears that the Russian government is focused on restricting cryptocurrency trade and investment in the region.
In addition to the new proposal to limit the amount of cryptocurrencies that retail investors can accumulate in one year, Russia has unequivocally banned the peer-to-peer (P2P) exchange of cryptocurrencies LocalBitcoins.
In particular, the country's Internet and telecommunications regulator Roskomnadzor has blocked access to the LocalBitcoins portal on the grounds that the platform is spreading prohibited information related to the purchase of digital assets such as bitcoin. Russian traders can only access LocalBitcoins using tools like VPNs that hide their real location.
Central banks around the world are scrutinizing CBDCs and assessing whether it would be wise to launch digital versions of their own national fiat currencies. China and the Bahamas are undoubtedly ahead of other nations in their homegrown digital currency plans. Russia is still in the early stages of establishing whether a central bank-backed digital currency would be invaluable to the nation. The Bank of Russia recently published a new report on the possible issuance of a digital ruble. However, the details of when the digital ruble will be launched remain largely unknown.