Vladimir Putin signed the law on CFA

Russian President Vladimir Putin signed the law “On digital financial assets (DFA) and digital currency”. It will enter into force on January 1, 2021.

The law signed by the president is registered under number 259-FZ. On July 22, the bill was adopted by the State Duma in the third reading, and on July 24, it was approved by the Federation Council. Recall that the law contains the concepts of digital currency and digital financial assets. According to the document, businesses will be able to issue regulated tokens on private blockchains. The issue, accounting and circulation of equity securities based on the CFA will be regulated by the 1996 Federal Law of the Russian Federation “On the Securities Market”. 

This law only partially regulates operations with cryptocurrencies. The only thing that defines the law on CFA is that cryptocurrencies cannot be considered a means of payment on the territory of Russia. This means that it is prohibited to pay with cryptocurrencies for goods and services in the country, as well as to disseminate information about accepting digital currency as payment. In addition, digital currencies in Russia have received legal status as property.

In some media, after the adoption of the draft law by the State Duma, statements began to appear that it allegedly permits the mining, purchase, sale and exchange of cryptocurrencies. They do not correspond to reality, since the law on the CFA contains only definitions of terms, it does not contain articles on the regulation of decentralized cryptocurrencies. All these operations will be regulated by another law, which is under development and may be adopted already in the autumn session. In the meantime, all of them still remain in the “gray zone”, but in practice, miners and exchangers may face an “extended” interpretation of the ban on the use of cryptocurrencies as a means of payment. 

In the current version, the CFA law exclusively regulates the circulation of tokens on private blockchains issued by registered organizations. Russian banks and exchanges will be able to become DFA exchange operators if they are included in a special register of digital financial asset exchange operators. This register will be regulated by the Bank of Russia, which will also determine which tokens will be available only to qualified investors. 

Last week, Anatoly Aksakov , chairman of the State Duma Committee on the Financial Market, announced that Russian commodity companies will start issuing their own stablecoins in the first half of 2021.

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