Stable Coins got the “green light” from DUMA in Moscow
The Federal Law of Russia on Digital Financial Assets
On 22 July 2020, the State of Duma in Moscow adopted, in the third and final reading, a new legislation about Digital Financial Assets (DFAs), Digital Currency and Amendments to certain legislative acts of the Russian Federation.
According to the new law, “cryptocurrency” is defined as a set of e-data in an information system, which is not a unit of Russian currency and with respect to which there is not a liable party. Furthermore, a cryptocurrency may not be used as a payment method for goods and services, but only as an investment and savings instrument, while legal protection is provided for only those who declared their cryptocurrency assets before the fiscal agencies.
The approval of this law will make it possible to digitize 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. More importantly, it enables the issuance and encourages the issuance of the so-called “Stable Coins” (i.e. digital tokens that are backed by real assets, such as commodities, fiat currencies, property, shares, etc.) Thus, a stable coin is stable as the name predetermines, because the volatility of the crypto-assets is reduced due to the non-volatile nature of the pegged real asset which is a parameter to the price of the token.
Interestingly, this Federal Law follows certain principles and guidelines proposed by the European Securities and Markets Authority (ESMA) and the new provisions of the 5th AML EU Directive concerning the Regulated Entities (digital wallet providers and crypto asset exchanges).
For more information please contact:
Dr. Charis Savvides
Lawyer and Partner at Stelios Americanos & Co. LLC
Head of the Innovation & Blockchain Department
T: +357 22 465500
STELIOS AMERICANOS & CO LLC is a full services law firm with headquarters based in Nicosia, Cyprus and a branch in Athens, Greece. It specializes in corporate, commercial and banking law, focusing mainly on transboundary banking financing, joint ventures, mergers, acquisitions, real estate, litigation and arbitration, while its practice area is extended to financial & investment regulatory compliance, innovation & blockchain legal advisory. The services provided by the Innovation & Blockchain department include regulatory compliance support to crypto-asset exchanges, digital wallet providers, asset tokenization projects and blockchain-based crowdfunding business models.