The world as a whole is slowly starting to accept Cryptocurrencies and, to a further extent, blockchains into their day-to-day functionality.
While countries like Uganda warns against the use of things like Bitcoin, Russia has set out to divide cryptocurrencies into three legal categories. They are thus legitimizing it within the country’s borders.
While not the first to do something like this, the country’s decision is still something of significant note.
The Three Categories
Alexei Moiseev explained that the three proposed categories for cryptocurrencies are as follows:
- Technical Tokens: Utility tokens used for the critical functioning of a network. Ethereum would most likely fall into this category.
- Virtual Assets: Assets used to transact value. Things like Bitcoin and Litecoin could very likely be classified as this, considering their prolific use as a payment medium. Russia’s Western counterparts, the US, has classified these things as commodities.
- Digital Financial Assets: These could easily be considered securities. Usually, tokens sold during an ICO, these assets have dividends and openly market themselves as a way to make money.
Official Legislation Possibly in November
More than likely, this new way to categorize cryptocurrencies will be officially proposed during the State Duma. Prime Minister Dmitry Medvedev has requested that the bill, dubbed Federal Law No. 419059-7, be adopted at the start of November.
Taking steps, Albeit Slowly
Russia, like many other countries, has concerns that fully legalizing cryptocurrencies within their country would make their own currency, the Russian ruble, obsolete. Russia’s Central Bank and its Ministry of Finance have said they don’t want these cryptocurrencies “unfairly” competing with the ruble.
Even so, Medvedev has taken to the press to say that cryptocurrency-related debit cards are wholly legal within the country. The significant factor of what is legal and what isn’t in terms of cryptocurrencies is the fact of whether or not it can first be linked to the ruble. This is in a bid to keep the ruble relevant as the world goes forward.
Regardless, this new bill will establish rights to cryptocurrency holders, making them able to rely on the government’s support if and when something unexpected (and legal) happens. Digital rights are classified as assets within Russian law and fall under the remit of civil law.
These laws group smart contracts with other, more conventional automatic systems banks use to get their payments for bills. However, there is no precedence within Russia’s legal system. For all of these laws to be enacted, it must first be written down within the country’s civil code. Then, and only then, will these laws be applicable?
The Possible Future of Currencies
Many countries have expressed their lack of tolerance for cryptocurrencies, usually for fear of what it will do to their own if it’s legalised within their borders. France and Germany have taken a stance against Libra, Facebook’s upcoming stablecoin. On the other side, Switzerland is supporting it, albeit if it remains within the country’s financial law.
It’s an exciting thing to speculate what will happen fifty years from now. Will we still use a country’s currency, or will cryptocurrencies have taken over the world. It’s impossible to tell at this point, and we will have to wait and see.