Amid an internal dispute over the status of cryptocurrency in the country, Russian President Vladimir Putin enacted 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 forces crypto exchanges and providers to refuse transactions in which digital payment can be construed as a replacement for monetary exchanges. However, there is a language in the final clause of the law which provides for exceptions for certain payments.
What this law means for crypto holders in Russia is simple: you can still buy cryptocurrency, but no seller in the country will take your bitcoin in exchange for, say, groceries. Past speculation suggests that the country is cracking down on companies that potentially use cryptocurrency as a means of circumventing sanctions imposed on Russia after its invasion of Ukraine. According to a New York Times article as of February 23, shortly after the invasion began, crypto was likely being used “to circumvent the checkpoints that governments rely on – primarily money transfers through banks – to block the ‘execution of the agreements’, while the sanctions were beginning to impose themselves.
Crypto in Russia is already a controversial topic as many factions within the government are debating whether to regulate or ban crypto. Protocol reported in January on the government disagreement over what to do with cryptocurrency. The Central Bank of Russia has called for a ban on crypto, however, the Ministry of Finance has opposed this stance, instead saying that current regulations are sufficient and necessary to allow crypto technology to develop.
What the future holds for cryptocurrency in Russia is unclear as things stand, but for now, the new law will come into effect on July 25.