On October 21st, Russia’s media outlet Vedomosti reported that the local draft bill that would cover cryptocurrency and blockchain regulation is finally being established. This bill gives both private businesses and legal entities the ability to store digitized shares on a blockchain.
The latest edition of the draft bill, titled “On Digital Financial Assets,” shows that the intention of the Russian State Duma is going to allow the creation and sale of “digital financial assets” (DFA) by the owners of private companies. The DFAs will then be used as a form of digitized equity, and the data will be verified entirely by the Russian Central bank. It will subsequently be stored for the companies on the blockchain to preserve it.
Basically, a DFA is the closest asset that the area has for cryptocurrency coins and tokens, but it has to be called a different name to adhere to the standards outlined in the regulatory measures. The civil law in Russia will reflect the definition of a DFA, which will allow investors to seek out the assistance of the courts, in the event that the rules regarding token issuance are violated.
This rule that DFAs must abide by, if it is approved at all three of the Duma Readings, will cover all limited liability companies, though it also includes non-public joint stock companies. Once the involved company decides to issue their own assets, traditional methods will not be usable for the company to go public with them.
The “On Digital Financial Assets” bill first came around in January this year when the Russian Ministry of Finance published it and submitted it for approval. Originally, this approval should’ve come by July 1st, 2018, but multiple deputies made some edits to the bill in a new draft in March. The updated version establishes that Know Your Customer (KYC) regulations that can validate customer identity for users on crypto exchanges.
This new draft received approval during the first of three readings by the State Duma by May.
There are three readings required, but the second hearing was recently pushed back to the autumn session with Duma, though that session goes until December. Still, the draft continues to be modified, with the latest edit being on October 19th, when the definition of cryptocurrency was pulled from the document.
This edit also removed the definition of mining, which means that the document, at present, has none of the main crypto terms.
The first release of the cryptocurrency bill has received a lot of backlash, which has continued through the readings. After the dissatisfaction of the first release, an alternative version was produced by the Russian Union of Industrialists and Entrepreneurs (RSPP).
The vice-president of the RSPP, Elina Sidorenko, commented that the updated bill will solve the “unfinished and fragmented” contradictions that are found in the bill.
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