Russian President Vladimir Putin has signed a law that bans using cryptocurrency as a mode of payment. In this Law, digital rights and digital assets are no longer accepted as a payment mode for goods and services. Other monetary units are also prohibited, reaffirming the ruble’s place as the only accepted currency that falls under the Russian Federation. This decision comes after the Russian government and Central Bank have debated long on what to do with crypto.

Russia is banning to transfer or accept digital financial assets as consideration for a payment mode

According to the Google Translate of the Russian website where the law is published, reads, “It is banning to transfer or accept digital financial assets as consideration for a payment mode, performed works, rendered services, as well as in any other way that allows one to assume payment for goods (works, services) by a digital financial asset, except as otherwise provided by federal laws."

Exchange operators and firms will be held accountable for any violations, ensuring compliance. Under Russian law, such operators have been deemed "subjects of the national payment system" and must follow restrictions that, among other things, limit the types of transactions they may undertake and prohibit them from offering leverage and yielding products to their consumers.

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Financial assets can now be bought directly by the Russian government without the involvement or agreement of the exchange. Securities that support digital assets may likewise be lawfully canceled without prior notification to asset holders.

The Bank of Russia advocated an outright ban on cryptocurrency

The Bank of Russia advocated an outright ban on cryptocurrency in January, either for payments or investments. The updated law does not go quite that far, but in February, Russia's Finance Ministry did present to the government a draft of cryptocurrency laws, which allows for investment in digital assets like Bitcoin or Ether but not utilizing them to buy goods.

Meanwhile, President Putin voiced enthusiasm for Bitcoin mining in January, saying that Russia had "some competitive advantages" to mining the money, including a "surplus of electricity and well-trained employees available in the nation."