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Draft law on digital financial assets approved in second reading

21 July 2020

Digital financial assets (DFAs) will be allowed to be issued by any legal entities (profit and non-profit organisations) and individual entrepreneurs, regardless of their residency, and to be purchased by anyone who wishes to. This is provided for by the draft law ‘On Digital Financial Assets, Digital Currency, and Amending Certain Laws of the Russian Federation’ adopted today by the State Duma in the second reading.

According to this draft law, the Bank of Russia is entitled to stipulate the characteristics of DFAs that may be acquired by non-qualified investors and the threshold of investment in such assets.

All transactions with DFAs may only be conducted through digital financial asset exchange operators, which can be banks and exchanges, as well as other legal entities, provided they meet specific criteria.

The draft law also introduces the definition of digital currency that may not be a means of payment. Moreover, digital currency holdings, receipt and transfers will be deemed to be lawful only upon their declaration.

The approval of this draft law will make it possible to digitise conventional financial instruments, expand alternative methods for investment raising, and protect investors and individuals against financial pyramids and other fraudulent schemes, and will also promote the evolution of innovative technologies.

Preview photo: SDammer / Shutterstock / Fotodom