The State Duma proposed recognizing cryptocurrency as property

The authors of the bill are State Duma Chairman Vyacheslav Volodin and Doctor of Law, Professor, State Duma Deputy Pavel Krasheninnikov. The adoption of this project will allow the state to collect taxes on transactions with tokens, and lenders to use them as debt collection.

The first legal definition of cryptocurrency may appear in the tax legislation of the Russian Federation. The draft amendments to the Civil Code propose to consolidate the concept of cryptocurrency as “other property.”

If this project is adopted, then Russian regulators will be able not only to recognize (or not recognize) transactions with cryptocurrency, but also to interpret the possibility of transactions with it, as well as assess its market value.

The authors of the project give the concept of what a “digital asset”, “digital right” and “digital money” are.

“Digital law” is inherently, in the opinion of the authors of the bill, the closest thing to a security is “a set of electronic data that confirms ownership” ( token certificates )

The project does not recognize cryptocurrency as a means of payment. But in their explanatory note, the authors indicate that this may happen in the future, when the procedure and procedure for the payment functions of digital currencies are further regulated.

The bill assumes that digital money will be subject to the same rules as digital rights - that is, there must be records in the information system about the owners of digital money, and they can only be transferred using a record. This will allow digital money to be included in the assets of the debtor and in the inheritance of individuals. (apparently, this refers to blockchain technology, although this term does not appear in the draft)

The general meaning of the bill is clear: the state will not tolerate the anonymous circulation of cryptocurrencies.  If this bill is passed, most transactions will no longer be anonymous. And this is where the interests of the state and crypto users fundamentally diverge. 

There is another important nuance: by defining cryptocurrencies as a property asset, the project immediately prepares the basis for subsequent amendments to the Tax Code in terms of charging VAT on transactions with digital currencies. Plus, hodlers will not be able to avoid taxation if there is a difference between purchase and sale if the cryptocurrency has been in storage for more than three years.

Previously, the Ministry of Finance prepared its own version of the bill on the regulation of cryptocurrency. It has not yet been submitted to the State Duma. The Ministry of Finance bill provides for limited circulation of cryptocurrency only through legal entities licensed for this type of activity.