parliament

Russian Parliament to Consider Restrictions for Non-Qualified Crypto Investors

08/10/2021 by Idelto Editor

Cryptocurrency can be quite complicated for some and lawmakers in Russia think they need to contemplate restrictions for private investors. According to a high-ranking representative of the legislature, the Russian parliament needs to provide them with “maximum protection” against the risks.

Members of Russian Parliament to Seek Protection for Citizens Investing in Cryptocurrency

Deputies in the State Duma, the lower house of Russian parliament, are thinking about introducing certain legal restrictions on the funds non-qualified investors can put into crypto assets. Anatoly Aksakov, chairman of the parliamentary Financial Market Committee, revealed the intention during an international conference on consumer protection for users of financial services, Interfax reported.

Billions of dollars are being spent on the acquisition of cryptocurrency, Aksakov noted in his statement while highlighting the great risks but also the great returns associated with this type of investment. He then emphasized that “digital assets are subject of our close attention,” insisting lawmakers need to adopt provisions that will safeguard “unqualified” individuals from “ill-considered investments.”

The high-ranking member of the Duma emphasized that Russian deputies will look into ways to ensure “maximum protection” for citizens investing in digital currencies and similar assets. As a new financial instrument, cryptocurrency can be quite complicated for non-qualified investors, Anatoly Aksakov pointed out in his address to the participants in the forum.

This isn’t the first time authorities in Moscow have discussed restrictions on how much ordinary people should be allowed to invest in cryptocurrencies. Last October, Bank of Russia proposed an annual limit of 600,000 rubles ($8,300 at the time of writing) seeking public opinion on the threshold.

The restriction had to be incorporated into the law “On Digital Financial Assets” which went into force on Jan. 1 this year. The head of the Duma’s Financial Market Committee did not elaborate on the legislative measures he was referring to now.

The Russian central bank, known for its hardline stance on crypto regulations, stated in July that the purchase of financial instruments linked to crypto-assets “entails increased risks of losses for people who do not have sufficient experience and knowledge.”

The monetary authority issued the warning as part of a recommendation for Russian exchanges to prevent trading domestic or foreign securities, the dividend payments of which depend on cryptocurrencies. The bank specifically listed products tied to the prices of digital assets, changes in crypto indices, and the cost of crypto derivatives.

Do you think the Russian parliament will adopt tough restrictions for non-qualified crypto investors? Tell us in the comments section below.

Lawmakers in Kazakhstan Propose Registration for Crypto Farms, Higher Electricity Rate for Miners

07/10/2021 by Idelto Editor

Members of the parliament in Kazakhstan have proposed the establishment of a state register for cryptocurrency farms operating in the country. Alarmed by the growing consumption of energy in the sector, the lawmakers also want to charge miners a higher price for the electricity they use.

Mazhilis Members Want Miners in Kazakhstan to Register With Government, Pay More for Power

A group of deputies from the Mazhilis, the lower house of Kazakhstan’s bicameral legislature, have voiced concerns over the growing electricity demand. The parliamentarians believe the surge is due to the influx of crypto mining companies into the country, attracted by its low energy prices.

Members of the People’s Party of Kazakhstan have put forward proposals to deal with the escalating situation. According to a report by Tengrinews, the lawmakers have urged Deputy Prime Minister Roman Sklyar to create a special register for crypto farms that mint digital currencies in the country.

Zhambyl Ahmetbekov, one of the deputies, noted that the increasing number of mining entities moving to the Central Asian nation significantly affects the volume of available energy. Foreign miners consume enormous amounts of electricity but they receive their revenues abroad, bringing no benefit to Kazakhstan, he pointed out, further stating:

In this regard, it is proposed to create a legislative register to account for the so-called mining farms and introduce a special increased electricity tariff for them.

Besides the higher electricity rate, the Mazhilis members have also called for the reintroduction of differentiated tariffs for the respective time zones of the day. Thus, prices will take into account peak hours of consumption and grid loads.

The proposals come after Kazakhstan’s energy minister Magzum Mirzagaliev revealed that power consumption this year jumped by 7% in comparison with 2020. “This is a very big increase,” the official said at a press conference last week, making it clear that the government is considering restrictions on mining facilities.

The spike in demand is largely due to the growing number of data centers devoted to cryptocurrency mining, Mirzagaliev told reporters. At the same time, he stressed that Kazakhstan needs to develop its crypto mining sector and announced the country intends to build new power plants with a combined 3,000-megawatt capacity in the next five years.

Amid an ongoing crackdown on bitcoin mining and other crypto-related activities in China, the region of Central Asia has attracted many businesses from the industry with its cheap energy. However, in Kazakhstan miners compete for electricity with other industries and households, which is worrying authorities in Nur-Sultan.

In June of this year, President Kassym-Jomart Tokayev signed a law amending the country’s legislation “on taxes and other obligatory payments to the budget.” The bill, adopted in parliament earlier that month, introduced a surcharge of 1 Kazakhstani tenge (approx. $0.0023) per kilowatt-hour used by cryptocurrency miners. The new fee will be imposed on Jan. 1, 2022.

Do you think Kazakhstan will introduce restrictions for cryptocurrency miners due to its power shortages? Tell us in the comments section below.

Crypto Mining Should Be Registered and Taxed in Russia, Financial Market Committee Chair Says

12/09/2021 by Idelto Editor

Cryptocurrency mining should be registered as entrepreneurial activity and taxed as such, according to Anatoly Aksakov, chairman of Russia’s parliamentary Financial Market Committee. The lawmaker also thinks Russian digital currency regulations need refinement.

Amendments Likely to Affect Mining, Taxation, Definition of Digital Currency

Discussing upcoming changes in the legislation regarding digital currencies in Russia, head of the Financial Market Committee in the State Duma, Anatoly Aksakov, expressed his opinion that cryptocurrency mining should be added to Russia’s register of entrepreneurial activities and taxed accordingly.

The treatment of crypto mining and the taxation of cryptocurrency-related operations are among the areas that are likely to be affected by the legal amendments to be adopted during the fall session of the Russian parliament. Speaking to Tass news agency on the sidelines of the Moscow Financial Forum this week, Aksakov elaborated:

Since this is a type of entrepreneurial activity, obviously, it is necessary to enter it into the register, assign a corresponding code and introduce taxation.

The parliamentarian was positive that amendments concerning digital currencies are to be expected as the Duma has already adopted on first reading a law dealing with the taxation of “in fact, cryptocurrencies.” Earlier this month, Chairman of the Committee on Legislation Pavel Krasheninnikov told Interfax that he hopes the law will hit the floor of the lower house again in the coming months.

Anatoly Aksakov further noted that the use of the legal term pertaining to cryptocurrencies, as it’s now defined, causes confusion. The concept of “digital currency” can refer to a central bank digital currency (CBDC) issued by the Bank of Russia but it can be understood as cryptocurrency as well, the lawmaker explained. Aksakov thinks the two should be clearly distinguished.

The Financial Market Committee chairman insisted more discussions are needed to determine what “digital currency” actually means. Although cryptocurrency is referred to as digital currency in Russian law, Aksakov pointed out that it is used as a financial instrument and financial asset for investment purposes rather than as a means of payment.

The high-ranking member of the Russian parliament added that Bank of Russia’s powers to issue a digital ruble and maintain its circulation should also be defined. The monetary authority announced a plan to digitalize the national fiat currency last October. The central bank is preparing to issue a prototype of the CBDC by the end of this year.

What are your expectations about the upcoming legal changes regarding cryptocurrencies and related activities in Russia? Let us know in the comments section below.

Central Bank of Iran Should Regulate Cryptocurrencies, Securities Watchdog Says

15/08/2021 by Idelto Editor

With bitcoin mining being a regulated activity in Iran, the head of the country’s securities and exchange regulator believes the central bank has to turn its attention to cryptocurrencies. The regulator is ready to consider accommodating crypto trade when digital assets are regulated.

Capital Market Regulator to Look Into Crypto Trading if Central Bank Regulates Cryptocurrencies

Iran’s Securities and Exchange Organization (SEO) has no immediate plans for hosting cryptocurrency trade in the country’s capital market but that may change if cryptocurrencies are properly regulated. That’s according to a statement by Mohammad Ali Dehqan who heads the authority.

Quoted by the Ibena news agency and the English-language Iranian business daily Financial Tribune, Dehqan noted that government rules for the mining of cryptocurrencies are currently the only crypto-related regulations. He further insisted:

Use of the mined cryptocurrency by the people is what the CBI should be dealing with.

The SEO official pointed out that as the Central Bank of Iran (CBI) has not made a specific announcement regarding the use of cryptocurrencies, digital currency trading in the Iranian capital market is not possible at this stage. However, Mohammad Ali Dehqan also emphasized:

We will look at the issue if the Central Bank of Iran regulates cryptocurrencies.

Iranian Authorities Under Pressure to Put Crypto Space in Order

Calls to regulate cryptocurrencies have been mounting in Iran where crypto investments have gained significant popularity. In May, the Iranian parliament called on financial regulators to adopt a cautious approach to dealing with the matter and urged capital market authorities to create efficient investment vehicles for legal crypto trading. In June, the country’s economy minister warned the government cannot interfere with the development of crypto technologies for too long.

Last month, lawmakers proposed draft legislation that would prohibit the use of cryptocurrencies in domestic payments but at the same time, regulate crypto exchange and provide support for crypto miners. The authors of the bill want the CBI to take charge of crypto market oversight. Recently, the Iranian National Tax Administration put forward a proposal to tax digital asset exchanges operating in the country and urged regulators to legalize their operations.

Iranian authorities have been trying to curb crypto trading although the CBI authorized Iranian banks and moneychangers to process cryptocurrency minted by miners inside Iran to pay for imports. Earlier in August, legal experts from the president’s administration explained the exchange between cryptocurrencies, or coin swapping, is not banned by the current regulations in the Islamic republic.

Bitcoin mining remains the one comprehensively regulated crypto business in Iran since the Tehran government recognized it as a legal industrial activity in 2019. Miners are required to apply for a permit from the Ministry of Industries which has already licensed a few dozen mining entities.

Do you expect Iranian authorities to regulate the use of cryptocurrencies in the country? Share your thoughts on the subject in the comments section below.

Ukrainian President Signs Law Opening Door for Digital Hryvnia, Regulatory Sandbox

01/08/2021 by Idelto Editor

President Volodymyr Zelensky has signed a law that will allow the National Bank of Ukraine to issue its own digital currency. The new legislation, which aligns Ukrainian regulations with EU rules, will also stiffen authentication requirements for clients of payment service providers.

New Legislation Allows Ukrainian Central Bank to Issue Digital Currency

The President of Ukraine Volodymyr Zelensky has signed the law “On Payment Services” which was adopted by the Ukrainian parliament on June 30, the president’s administration announced this week. The legislation aims to “modernize and further develop” the payment services market and promote the introduction of innovations in the financial sector, a press release explains.

One of the provisions in the bill grants the National Bank of Ukraine (NBU) powers to issue its own central bank digital currency (CBDC). Authorities in Kyiv have been mulling over a project to create a digital hryvnia for quite a while. A recently conducted survey has indicated that the country’s financial sector would like the e-hryvnia to facilitate transactions in the crypto space.

NBU will also be able to set up a regulatory sandbox to test new services, technologies and tools in the payments sector that will be based on innovative technologies, the president’s office explained. The platform will allow the financial regulator to closely interact with startups from the industry and better understand their needs.

Ukraine to Introduce Stricter User Authentication Rules for Payment Service Providers

The law “On Payment Services” aligns Ukraine’s legislation with the EU’s regal framework in the field, facilitating a future integration of the country’s payment system with that of the European Union. Ukrainian lawmakers have adopted the norms of important European regulatory acts such as the Second Payment Directive (PSD2) and the Electronic Money Directive (EMD).

The legislation is tailored to ensure transparency in the provision of payment services and strengthen consumer protection. Payment companies will have to meet stricter requirements regarding risk management. In certain cases, the platforms will be required to implement enhanced user authentication procedures, necessary to prevent cyber fraud.

The law defines nine different categories of payment service providers, introducing new ones like electronic money institutions and branches of foreign payment institutions. Non-bank payment service providers, such as payment institutions, e-money institutions, and postal operators will be able to open payment accounts, issue payment cards, and electronic money. Non-bank financial institutions will not be required to participate in payment systems in order to make transfers.

The presidential administration also pointed out that the law “On Payment Services” creates conditions for the introduction of the ‘open banking’ concept in Ukraine. Its main purpose is to integrate various service providers and technology companies into a single payment ecosystem. Authorities in Kyiv hope to implement the open banking system by 2023.

Do you think the new legislation will benefit the Ukrainian crypto industry? Tell us in the comments section below.