The Bank of Russia proposes tax cuts for long-term holders of digital assets.
The Central Bank of Russia wants to give tax breaks to people who hold digital financial assets for a long time. A consultation paper about the development of the digital asset market in the Russian Federation has been used to spread the idea.
In a new report about the market for digital assets, the Bank of Russia talks about regulation.
The monetary authority of Russia has put out a report about the future of the digital asset sector in Russia. The document looks at how the market for digital financial assets (DFAs) and utility digital rights (UDRs) has changed over time, as well as some of the legal terms that apply to cryptocurrencies and tokens, especially those with an issuing entity.
The Central Bank of Russia (CBR) thinks that the DFA framework needs more rules to make it better and more in line with the rules that govern the traditional financial industry. The regulator said that this would increase investment, circulation, and liquidity while making sure that investors are better protected.
One of the things looked at in the consultation paper is taxation. The Bank of Russia wants to give tax breaks to investors who hold DFAs and UDRs for a long time. They want to do this by adopting a system similar to the special tax rules that apply to people who have individual investment accounts. The latter was made to get people to put their extra money into the securities market.
The CBR thinks that its proposal would give Russian people and businesses new opportunities, make it easier to deal with digital assets and digital rights, and lower operating costs. But it says that more talks with relevant government agencies and market participants are needed before these tax breaks can be approved.
Russia’s Central Bank wants investors in digital assets to be able to prove who they are better.
The Russian central bank also wants to see changes made to the way that DFA holders are identified. The monetary policy regulator, who was quoted by RBC Crypto, said this would allow the country to let foreign DFAs into its market, adopt rules made for smart contracts, and develop the accounting procedures it needs.
The CBR is also looking for feedback on the idea of making it easier to tokenize assets like securities and bonds, precious stones and metals, property rights in the form of non-fungible tokens, and claims that are backed by mortgages. The Bank of Russia also wants the public discussions to talk about putting digital assets on existing exchanges and buying and selling digital assets through middlemen.
Russia has been trying to expand its regulatory framework for DFAs, and institutions have been having a debate for months about the status of decentralised assets like cryptocurrencies. In January, the central bank called for a ban on all crypto activities. However, it later agreed with the finance ministry in Moscow to make crypto payments across borders legal. It changed its mind because of growing calls for sanctions against Russia because of its invasion of Ukraine, which began in late February.
Do you think that the Russian government will come up with tax breaks for people who own digital assets? Tell us what you think will happen in the comments section below.
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