At its inception, Cryptocurrency was initially introduced as an alternative to traditional currencies, viz a viz, as a decentralized currency. However, as the market evolved, so did the opinion surrounding the virtual currency. While a group of people still see it as an alternative to fiat money, others consider it as a property or asset. Russia falls under the second group of people.
The Russian Parliament is currently drafting on a bill that will prohibit cryptocurrencies from being used for payments of goods and services within the country. It will be treated as a digital asset in the eyes of the Russian law.
In the words of the President of the Central Bank of Russia, Elvira Nabiullina, Bitcoins, and other cryptocurrencies are “quasi-money”- which means that even though they are assets, they are highly liquefiable and can be easily converted to fiat money. Hence, if investors also want to use virtual currencies for purchasing goods, they can do so by quickly changing them into fiat cash first. However, it should be noted that currently, only trading platforms with stock exchange licenses have the authority to convert digital tokens into fiat currency.
The reason behind this new regulation is to control the digital asset, so it doesn’t become a tool for tax evasions and money laundering. Since only licensed operators under government control will be allowed to handle crypto transactions, all the illegal activities revolving around cryptocurrencies should cease.
This step made on the part of the Russian government showcases they are willing to entertain the new digital currency revolution, all the while maintaining state interests as well. The UK government is taking a similar diplomatic stance. They are yet to put a label on how the law will treat cryptocurrencies but has currently formed a task force to scrutinizes the pros and cons of the cryptomarket.