Markets News Report
January 03, 2024

Russia to Implement Tax Collection in Digital Rubles by 2025

In Brief

Russia plans to commence tax collection and disbursement of pensions and social benefits in digital rubles, starting from 2025.

Russia to Implement Tax Collection in Digital Rubles by 2025

Russian tax authorities plan to commence tax collection in digital rubles from 2025. Recent amendments to the tax code, signed into law last year, anticipate a transition within the Federal Tax Service of Russia, marking a shift toward collecting taxes and disbursing pensions and social benefits in digital rubles.

The Ministry of Finance suggested the possibility of settling bills amounting to over $155 million in digital rubles. However, detailed plans remain undisclosed, leaving room for potential features such as “marked” or color-coded Central Bank Digital Currency (CBDC) tokens.

The ministry had earlier announced intentions to execute welfare and subsidy payments using CBDC coins this year. As part of the broader pilot initiative, government entities have committed to taking a more proactive stance with the digital currency in 2024.

Tax authorities are expected to initiate pilot projects for CBDC tax payments this year.

Russian Banks May Gain Authority Over CBDC Transactions

Reports suggest that banks may be granted the authority to block CBDC transactions. The anti-money laundering regulator Rosfinmonitoring, is collaborating with the Central Bank on legislation that will empower banks to halt digital ruble transactions. This intervention would be possible if banks “suspect” that such transactions are conducted for criminal purposes.

“Nothing should change for individuals for anti-money laundering procedures. Our basic position is that all anti-money laundering mechanisms that exist for other forms of the ruble will also work for the digital ruble,” said German Neglyad, the Deputy Director of Rosfinmonitoring.

Russia Adapts Digital Asset Regulations

Russia has been navigating the complex landscape of digital asset regulations, adapting its approach to the evolving world of cryptocurrencies and blockchain technology.

Last year, the Russian anti-money laundering regulator Federal Financial Monitoring Service (Rosfinmonitoring) announced the “monitoring” of over 25,000 cryptocurrency holders due to money laundering suspicions. Russian authorities remain cautious about the increasing use of cryptocurrencies in Russia, viewing them more as potential tools for money laundering.

In a recent development, Rosfinmonitoring asserted that advancements in blockchain analytics software have bolstered its monitoring capabilities. Beginning in 2020, the body initiated the use of a de-anonymizing tool in collaboration with VTB Bank, overseeing “over 20” blockchain networks, including Bitcoin.

The testing of this tool is currently “underway” at various government organs, such as the Ministry of Internal Affairs, the Federal Security Service, and the Investigative Committee.

As Russia navigates digital asset regulations, the decision to collect taxes in digital rubles highlights the country’s strategy to leverage the potential of digital assets with the unfolding developments expected to influence the nation’s involvement in the digital economy.

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About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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