The relationship between cryptocurrencies and governments has become increasingly complicated in recent years. Well, although initially governments and regulatory institutions did not bother to pay attention to Bitcoin and Blockchain technology. As cryptoassets gain in importance, they become a threat to governments’ monopoly on monetary policy. Despite which, from now on cryptocurrencies are legal in Russia.
Bitcoin and governments
When it comes to relationships with governments, there is an important gap between Blockchain technology and cryptocurrencies. Well, although Bitcoin has been the instrument that has allowed the popularization of blockchains worldwide. Governments like Russia’s have distinguished product technology in their approach to both.
Thus, while Blockchain technology is considered by the world’s governments as a vital element to achieve economic prosperity, and stay competitive in the international arena. Cryptocurrencies consider them as threats to the established monetary order with central banks at their core. And therefore, as an element that requires regulation, if not simply its prohibition.
And, at the end of the day, cryptocurrencies were created with the aim of replacing Fiat money as a means of payment and store of value worldwide. So it makes sense that governments like Russia do not welcome the expansion of their adoption. Trying to establish all possible mechanisms to control virtual currencies. Including creating your own government virtual currencies to compete with cryptocurrencies.
Cryptocurrencies achieve legal status in Russia
However, the big problem that governments face when trying to deal with cryptocurrencies, is that the technology already exists and spread throughout the world. So it would be impossible to claim to wipe crypto assets off the face of the earth. They are a reality that they must face, and that their legislation must adapt to.
For this reason, Russia has approved a law for the regulation of digital assets, which guarantees cryptocurrencies a legal status, although it prohibits their use as a means of payment in the country, starting from January 1, 2021.
Thus, digital money “It is recognized as an aggregate of electronic data that could be used as a means of payment, as it is not the monetary unit of the Russian Federation or a foreign state, and as investments, digital money cannot be used to pay for any good or service“
Despite this, the new law provides the right for Russian banks and exchanges to become cryptocurrency traders, as long as they declare their activities to the Central Bank of Russia. Ensuring legal protection for holders of digital assets who declare them to the government. What, despite prohibiting its use as a payment method, is a step forward for cryptocurrencies. What makes this law our Today’s Data here at CryptoTrend.