Russia proposes: Crypto exchanges must be licensed and transactions over 600,000 rubles must be reported to the tax authorities

According to the Russian newspaper Kommersant on February 9, the Russian government and the central bank reached an agreement on the future system for the circulation of cryptocurrencies in Russia, with the result that cryptocurrencies will be regarded as currency "analogues" rather than digital financial assets (DFA).

The Russian Ministry of Finance and the Central Bank will formulate relevant bills before February 18. This means that Russia will not completely ban the use, exchange and circulation of digital currencies in the country.

According to Coindesk on February 10, the cryptocurrency regulatory proposal released by the Russian government shows that Russia may allow cryptocurrency transactions, but they can only be purchased through locally registered and licensed companies so that users' identity transaction information can be provided to government agencies.

In addition, all cryptocurrency-related transactions exceeding 600,000 rubles (about 51,000 yuan) must be reported to the Federal Taxation Service. Failure to report should be considered a felony, the report said.

The proposal suggests allowing banks to act as intermediaries between users and cryptocurrency trading platforms. These institutions will need to verify the identity of users, check transactions for signs of illegal activity, provide channels for fiat currency transfers, and keep transaction information for at least 5 years. Banks should also provide users with necessary tax reporting documents and transaction data from government agencies upon request.

Trading platforms and peer-to-peer marketplaces must register as legal entities and join the official register of digital currency trading platform operators. They must open crypto accounts at authorized banks and meet certain requirements of traditional financial institutions. Forex exchanges need to set up offices in Russia and register there.

According to preliminary estimates, the Russian government may collect up to 1 trillion rubles (about $13 billion) in crypto taxes each year. According to reports, the local Russian media The Bell obtained an analytical report from the government, which estimated the annual tax revenue. The report stated that Russians hold 12 of cryptocurrencies, which is about $214 billion. Russian crypto accounts are estimated to be about 12 million, plus a large number of over-the-counter cryptocurrency transactions. Government agencies believe that even the most direct tax collection can generate cryptocurrency tax revenues of 146 billion rubles to 1 trillion rubles.

As the country with the third largest Bitcoin computing power in the world, how to levy taxes on crypto mining is also of great concern to the industry, but the documents currently published do not yet involve cryptocurrency mining.