Leningrad Region Wants Bitcoin Legalized
CryptoBit News Today2 min read
Called "On digital currency, digital financial assets and digital rights", it aims to legalize cryptocurrency turnover and mining in the country. Its first reading will be in October.
The move by the Leningrad Region comes after similar actions by other Russian areas. Most notably, in August, Moscow City Duma urged the Russian legislature to define the legal status of cryptocurrency. That met no immediate response. ## Why the Leningrad Region wants Bitcoin legalized
The resolution, filed by United Russia, enumerates several reasons behind the initiative.
First, cryptocurrencies are gaining popularity among the residents. They are either replacing traditional payment instruments, or used as a cash alternative in shopping.
Second, the draft law does not allow for the extraction of cryptocurrency. That restricts the Russian economy from benefiting from the cryptocurrency industry. It is feared that such restrictions will lead to an outflow of capital, talent, and production from the region to jurisdictions with more favorable laws.
Third, the Leningrad Region has the necessary local conditions for the development of this area, including a developed IT industry and the nearest subarctic zone.
Finally, the legislation will allow the federal budget to receive "significant monthly inflows". ## Would bitcoin being legalized be good for Russian businesses?
The initiative sparked a lively debate among Russian businesses.
"Businesses are interested in cryptocurrencies because, unlike traditional financial institutions, they allow for near-instant and low-cost cross-border settlements in foreign trade in the absence of a Russian international payment system," a Russian gun manufacturer said.
However, the director of a Moscow-based missile manufacturer slammed the initiative as "bad for the economy" and a threat to "disrupt the RBI [Ruble Banking System]".
Tax authorities in the region were more open to the idea. "Toronto as a zone of preferential taxation with the launch of blockchain platforms for the extraction of the most popular cryptocurrencies will attract companies that generate significant tax revenues," the head of State Tax Service told Bit News Today. The city is an industrial hub in the Leningrad region.
If the draft law is adopted and comes into force, cryptocurrencies will be legalized and regulated in Russia. However, the Russian central bank has been reluctant to embrace cryptocurrencies, and their actual status in Russia may remain unclear for the foreseeable future. ## So what does it mean for readers -- businesses and crypto users?
For businesses, it will mean regulation of cryptocurrency transactions. Currently, there are no explicit regulations governing the purchase and sale of cryptocurrencies in Russia, making the industry largely unregulated. If the draft law is adopted, it will provide a clear legal framework for businesses that want to use or issue cryptocurrencies.
For crypto users, the introduction of the legislation will not have a significant impact, though it may make them feel more secure when dealing with cryptocurrencies. Currently, cryptocurrencies are not officially recognized by the Russian federal government, and their users risk being prosecuted for illegal financial activities. With the new law, cryptocurrency users will be given more legal certainty.
Lastly, the legislation will pave the way for the creation of special economic zones in Russia, with tax benefits for companies focused on cryptocurrency mining or investment.
