In the wake of an ongoing internal discord over cryptocurrency’s standing in Russia, President Vladimir Putin signed into law a new bill on Friday. This legislation explicitly bans digital assets, including cryptocurrencies and NFTs, from being utilized for purchases of goods and services.
According to Protocol, this fresh legislation also obliges providers and exchanges dealing with crypto to reject any transactions where digital payment could be seen as a substitute for traditional money transactions. Nonetheless, certain exemptions are mentioned in the law’s final clause.
The impact of this law on Russian crypto holders is quite clear-cut: though one can still buy cryptocurrencies, vendors in the country will not accept, for example, Bitcoin in exchange for groceries. Past conjectures have pointed towards the country’s attempts to stifle businesses that might use cryptocurrencies as a method to dodge sanctions placed on Russia following its invasion of Ukraine. As stated in a New York Time article dated February 23, right after the onset of the invasion, it is likely that cryptocurrencies were being employed “to bypass the control points that governments rely on — mainly transfers of money by banks — to block deal execution,” as sanctions started taking effect.
The subject of cryptocurrencies in Russia is a contentious issue with various governmental factions arguing whether to regulate or ban crypto altogether. As reported by Protocol in January, there’s a stark disagreement within the government regarding the approach towards cryptocurrency. While the Central Bank of Russia has advocated for a complete crypto ban, the Ministry of Finance has opposed this viewpoint, asserting that existing regulations are both adequate and essential for the growth of crypto technology.