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Russian law defines cryptocurrency

Russian law defines cryptocurrency
By We Play Coins
Added on Oct 04, 2019

Russian law defines cryptocurrency in a new law outlining “digital rights”. While the law does not deal with cryptocurrency as a whole, it does define the 3 ways cryptocurrencies can be legally defined.

In a week or bad news for cryptocurrency, the community has something to celebrate. The Russian government has recently passed a law defining cryptocurrencies. The law is a general “digital rights” one which seeks to protect the digital assets of consumers. Among the different digital assets, cryptocurrencies play an important role, especially in Russia.

Russia is home to many mining companies that mine Bitcoin for a living. They have made use of the old electricity hubs and empty warehouses to setup mining companies. The large, cold warehouses, relics of the now-defunct Soviet, serves as a perfect place to house mining specific hardware. Specialised ASIC processors that are used to mine Bitcoin faster are notorious for their heating issues. Recently, a Bitcoin mining facility burnt down and caused a loss of $10 million and a reduced hashrate for Bitcoin.

The law

According to the recently passed law, cryptocurrencies can be divided into 3 types of assets.

  1. Utility tokens

These tokens are usually used within a network as a way to pay bills or transact. The best example for this would be the Ethereum Network.

  1. Virtual assets

These are digital assets that have an independent value on the market. An example for this would obviously be Bitcoin, followed by Litecoin. People tend to hodl these tokens and sell them or trade them for other tokens.

  1. Digital financial assets

These are the investment tokens that users purchase to possibly trade in the future. It’s like buying stocks in a startup. The purpose is to sell these tokens for a higher price at a later stage. It is seen more as a long term investment.