Cryptocurrency over the past 10 years has made a quick and strong breakthrough in its development, the rate is constantly increasing. Many citizens buy bitcoins, mine and conduct other operations with currency. Have you ever thought about whether Bitcoin is legal in Russia in general? Is it possible to acquire it and conduct other operations with it? Let's understand and understand whether it is possible to do such a thing or is it a crime.
What is cryptocurrency?
This is a form of virtual money that does not have a material form like ordinary money, bonds or other securities. We will not be able to see computer currency, its rate is also difficult to predict, you need to constantly monitor it. The advantage is the inability to create a fake coin, each unit has a digital code, which is simply impossible to replace, it is unique.
In addition, a feature is the lack of administrators at any level. That is, neither banks, nor public authorities, nor anyone else can act on it and control transactions. No one will be able to cancel operations with money, return them, block or commit a forced withdrawal. The most popular and first type of cryptocurrency is Bitcoin.
The danger of bitcoin and the double attitude towards it are due to economic instability and the lack of attachment to the bank. Due to the inability to control cryptocurrency flows, fraudsters and criminals often operate in this area. With this type of money, you can easily buy goods whose circulation is prohibited in our country, such as weapons or narcotic substances. Therefore, it is extremely important to form the legal status of the currency, which will entail full legal relations.
Economic characteristic
Bitcoin is recognized as the first cryptocurrency, it is the symbol and flagship of the cryptocurrency world, and it is also the currency of the same name that circulates within the system. This is a digital product that has a limited offer. In general, cryptocurrency is a virtual convertible currency that is protected using virtual methods and is based on mathematical principles.
Now let's see if bitcoins are banned in Russia or not.
Entity Approaches
Currently, in the Russian Federation there is no single approach to understanding the nature of bitcoin. Is it money or is it just a money substitute? Given the state's approach to the taxation mechanism, it is necessary to clearly understand whether cryptocurrency refers to property, electronic money, fiat money or securities. Recognition of the legal status of bitcoin in the Russian Federation and the legality of transactions with it will determine the taxation mechanism and tax rules associated with the new regulatory object.
On the territory of Russia, approaches to the nature and essence of cryptocurrencies changed quite rapidly:
- In February 2014, the Prosecutor General's Office classified bitcoins as a money surrogate and banned their distribution and operations with them. The Central Bank of the Russian Federation expressed an ambiguous attitude to bitcoin, indicating that it is a money surrogate that is not prohibited from using it in Russia.
- In March 2017, the Central Bank held a meeting with the Ministry of Finance, the Ministry of Economic Development and law enforcement agencies, at which the participants spoke in favor of the approach to classify bitcoins as a digital product.
- In September 2017, the Central Bank recalled its statement three years ago and again warned of the risks of using ICOs and cryptocurrencies. The Ministry of Finance of the Russian Federation also did not express a clear position on this issue.
- In March 2016, the agency prepared a bill according to which criminal penalties were introduced for the issue, purchase or sale of bitcoin.
- Despite this, in July 2016, cryptocurrency is equal to foreign, the circulation of which is not prohibited.
As we can see, the state authorities for a long time could not decide whether it is legal to buy bitcoins in Russia. Great hopes are placed on the bill, which is due to be published in September 2018.
Is there a law governing cryptocurrency?
When answering the question of whether Bitcoin is legal in Russia, we recall that on October 24, 2017, as part of the implementation of the state program Digital Economy of the Russian Federation, V.V. Putin instructed the Government to develop regulation of cryptocurrency, token, and smart contract. Changes to the current legislation must be made before July 1, 2018. At the moment, the deputies have shifted the deadlines from July 1 to September, at which time the new law should be published and tested. Due to the fact that there is currently no law on the operation, status and taxation of Bitcoin, the bill will resolve many ambiguities and difficulties in this area by answering the question of whether it is legal to mine bitcoins in Russia.
The essence of the bill
The law will be called “On Digital Financial Assets,” which illustrates an attempt to legitimize all actions in the field of cryptocurrency. The first step is to determine the token, a digital asset that combines the token with cryptocurrency. Blockchain is recognized as a single registry of such assets. At the moment, it is not prohibited in the Russian Federation, because you can apply it not only to cryptocurrency, but also for maintaining any registry, it is convenient and uncomplicated. The provisions of the law govern the creation of a virtual digital wallet on which the currency will be stored. A definition is given of a smart contract that regulates any movement of bitcoin.
In addition, the law not only legalizes bitcoins in Russia, but also all operations that can be carried out with it, including mining, we will talk about it later.
What does it mean to mine?
In general, this process refers to the creation of fundamentally new structures, the word "extraction" is a synonym. In the field of cryptocurrency, mining means solving mathematical problems and creating new currencies by computers that are not interconnected, but with the help of the miner program connected into a single system. As a result, bitcoins are created, which, as a result of the work done, go to the account of a specific person. Cloud mining is becoming more and more popular, which allows you to reduce the cost of production. There will be no need to control equipment, spend money on electricity for all computers, configure programs, everything is done remotely, in the Internet space called the cloud.
Cashing process
Answering the question of whether Bitcoin is legal in Russia, we will pay some attention to withdrawing it into tangible money. Is this possible, and if so, how to do it? Yes, it is possible, but it is not as easy as it may seem. In this area, there are more and more scammers and scams:
- The most common is exchange through a crypto exchanger. There is a whole portal that includes statistics of all courses that are maintained by such exchangers. A person who has bitcoin and who wants to withdraw it can go to the portal and choose the most convenient exchanger for himself. The portal is called Bestchange. This is a convenient and easy-to-use resource for people who are wondering about how to cash bitcoin in Russia.
- If in the first case the capital of the crypto investor is compromised, and the process is based on trust, then the next method is more proven - exchanges. In Russia, YObit is among the checked exchanges. You need to register to start work, to transfer the system will create a special character set or code that you just need to enter into your wallet, and the money will be transferred over time to the exchange. Further, the system will offer several options for transferring money to rubles. Everyone chooses the most convenient for themselves.
- Cryptocard There is a Wirex system with which a wallet with bitcoins is attached to a bank card. Outwardly, it has no differences from a conventional plastic card, it can also be used to pay, transfer funds and exchange it.
- You can buy (exchange) bitcoins from hand to hand. There are forums where people offer to exchange cryptocurrency for fiat. Fiat refers to paper money through which payment and other financial transactions are made. This is a classic purchase option. If in this method you have a question of legality, you can buy bitcoin in Russia, as well as sell. Soon, the law will enter into force, and all operations will be carried out at the legal level.
Bitcoin Attitudes in Japan and Singapore
We examined the approaches to understanding, answered the question of whether Bitcoin is legal in Russia, now you can see the practice of other states and their solution to existing problems.
In Japan, the Cabinet of Ministers recognizes bitcoins as fiat money and establishes a policy in the field of integration of the former into the state banking system. The Financial Services Agency in Japan is actively developing and regulating the cryptocurrency issue procedure. Singapore took a similar position in 2014. First of all, this indicates that in some states at the present stage of development, cryptocurrency has become a full-fledged unit of calculation, which is recognized and actively used in the market.
Opposite point of view
In Norway, bitcoin is not currently recognized as a means of payment and does not apply to money. The Netherlands Tax Service does not accept bitcoin as a currency, although it does not prohibit its circulation.
The position of the state in Denmark is similar, which in 2014 explained that cryptocurrency does not have real trading value, such as gold, platinum or silver, therefore it cannot be used on the market.
What is the regulation in the USA and Israel?
In 2017, the Israeli Tax Service officially published a bill in which virtual currencies are qualified as digital stable units that have a nominal value and which can be used in barter and investment.
In the United States, the approach to bitcoins varies, on the one hand, it is recognized as a commodity, and on the other - a security. At present, no unified approach has been found; accordingly, a policy in this area has not been worked out.
Summarizing
We examined a very complex phenomenon that affects not only a single state, but also the entire world community - cryptocurrency. We analyzed approaches to understanding not only from an economic point of view, but also from the side of state authorities, answered the question of whether bitcoins and operations with them are prohibited in Russia, how the authorities of other states relate to this. If you are engaged in cryptocurrency, be careful, because in September there will be a law regulating the basic concepts and operations with it. It will be necessary to carefully study the provisions of the normative act and act in accordance with the law. At the moment, everyone acts according to the principle: what is not prohibited is allowed. From the moment the cryptocurrency law comes into force in Russia, all actions in cyberspace will be strictly controlled by state authorities.