New Russian Regulations Replace ‘Cryptocurrency’ with ‘Digital Rights’ Terminology

Many countries have been debating as to how cryptocurrencies will be handled and what it falls under when it comes to tax purposes. Of the many attempts made, Russia has also proposed several regulations that could come into effect as of July 29^th.

How Will Cryptocurrencies Be Classified?

According to Anatoly Aksakov, Head of State Duma Financial Market Committee, digital currencies will now be addressed as ‘digital rights’. This means that any other terms that exist, including views of “digital money” and “digital currency” will be lifted entirely from its legislation. Aksakov also added that the main term by which everyone knows the digital currencies, i.e. “cryptocurrencies”, will be removed.

Despite the new way of classifying digital currencies, the country will allow trading, but instead of considering them as assets, they will be merely rights.

What Changes Will Be Made For Tax Purposes?

Due to Russia’s reclassification of the digital currency, the way in which consumers will have to report them will also change. In order to do so, tweaks will be made to the tax laws along with a new category, says Aksakov. He also underlined that,

“digital assets will be considered not as property, but as a new type of property digital rights.”

What Measures Have Been Placed For Initial Coin Offerings (ICOs) And Its Adoption?

It appears that the State Duma Financial Market Committee has yet to determine the outcome of ICOs, and how such fund raising will be regulated. Mainly, their goal seems to revolve around assessing the potential risks associated prior to arriving to a thorough conclusion.

Here is an extract of the approach Russia plans to take:

“Token is a digital law, and as it continues to operate it is the prerogative of the Central Bank. First, it is obviously for the ICO procedure to be issued, used as security. […] As for the use of tokens […] this is the next stage, after testing, when the Central Bank examines whether this instrument carries a risk as a means of payment, calculation for the financial system.”

What do you think about the reclassification of cryptocurrencies in Russia? Will the notion of “digital rights” pose any risks for consumers and businesses?