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Russian parliament approves tax break for issuers of digital assets

MOSCOW, June 28 (Reuters) – Russian lawmakers on Tuesday approved a draft law that would potentially exempt issuers of digital assets and cryptocurrencies from value-added tax.

Russia has long voiced scepticism of cryptocurrencies and other digital assets, with the central bank citing concerns over financial stability.

But in February the regulator gave blockchain platform Atomyze Russia the first licence to exchange digital assets. A licence for dominant lender Sberbank (SBER.MM) soon followed.

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Unprecedented Western sanctions have hit the heart of Russia’s financial system over events in Ukraine and lawmakers have scrabbled to bring in new legislation to soften the blow.

The draft law, approved by State Duma members in the second and third readings on Tuesday, envisages exemptions on value-added tax for issuers of digital assets and information systems operators involved in their issue.

It also establishes tax rates on income earned from the sale of digital assets.

The current rate on transactions is 20%, the same as for standard assets. Under the new law, the tax would be 13% for Russian companies and 15% for foreign ones.

The draft must still be reviewed by the upper house and signed by President Vladimir Putin to become law.

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Reporting by Reuters, Editing by Louise Heavens

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Bitcoin drops 6.9% to below $30,000

June 1 (Reuters) – Bitcoin, the world’s biggest and best-known cryptocurrency, dropped 6.9% to $29,555.35 at 22:03 GMT on Wednesday, losing $2,262.81 from its previous closing price.

It was down 38.9% from the year’s high of $48,234 on March 28.

Ether , the coin linked to the ethereum blockchain network, dropped 7.52% to $1,794.68, losing $145.87 from its previous close.

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Reporting by Shubhendu Deshmukh and Rachna Manojkumar Dhanrajani in Bengaluru

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Bitcoin surges nearly 8% to $31,780

May 30 (Reuters) – Bitcoin rose 7.93 % to $31,780.51 at 2200 GMT on Monday, up $2,334.8 from its previous close.

The world’s biggest and best-known cryptocurrency is up 25.1% from the year’s low of $25,401.05 on May 12.

Ether , the coin linked to the ethereum blockchain network, rose 9.8 % to $1,989.38 on Monday, adding $177.54 to its previous close.

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Reporting by Ann Maria Shibu in Bengaluru; Editing by David Gregorio

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Russia mulls allowing cryptocurrency for international payments, Interfax reports

Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 14, 2018. REUTERS/Dado Ruvic/Illustration

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May 27 (Reuters) – Russia is considering allowing cryptocurrency to be used for international payments, Interfax news agency quoted a government official as saying on Friday.

“The idea of using digital currencies in transactions for international settlements is being actively discussed,” Ivan Chebeskov, head of the finance ministry’s financial policy department, was quoted as saying.

Russian officials are wrestling with how to regulate the country’s crypto market and use of digital currencies, with the finance ministry opposed to the central bank’s calls for a blanket ban. read more

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Discussions have been ongoing for months and though the government expects cryptocurrencies to be legalised as a means of payment sooner or later, no consensus has yet been reached. read more

The finance ministry is discussing adding the latest proposal on international payments to an updated version of a draft law, the Vedomosti newspaper reported on Friday, citing government officials.

Allowing crypto as a means of settlement for international trade would help counter the impact of Western sanctions, which has seen Russia’s access to traditional cross-border payment mechanisms “limited,” Chebeskov said.

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‘Pay more attention’ Ethereum co-founder says of crypto crash

Souvenir tokens representing cryptocurrency networks Bitcoin, Ethereum, Dogecoin and Ripple plunge into water in this illustration taken May 17, 2022. REUTERS/Dado Ruvic/Illustration

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DAVOS, Switzerland, May 25 (Reuters) – Ethereum’s co-founder Gavin Wood said cryptocurrency investors need to be more aware of what is backing their holdings after a market rout which wiped more than $800 billion off their value.

“I would hope that people pay more attention to what is belying the currency name when they get involved in a community, ecosystem, economy,” Wood told Reuters on the sidelines of the World Economic Forum in the Swiss Alpine resort of Davos.

Crypto and blockchain firms have been highly visible at this year’s gathering of business and political leaders, despite the market plummeting in value in the weeks leading up to the event, with the eighth-largest coin Luna becoming virtually worthless.

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British computer scientist Wood was attending for the first time to talk about a new partnership between his blockchain project Polkadot with American billionaire Frank McCourt’s Project Liberty.

Blockchains are public ledgers that keep records of transactions on networks of computers, and, along with cryptocurrencies, are largely unregulated.

“The internet has no real concept of legality, because legality is something that is determined by sovereign nations,” Wood said in an interview.

The new partnership is aimed at decentralizing control of the web and giving users more control of their data, Wood said.

“The technology cannot prevent people from making mistakes but can help those who want to understand better the facts of the world, what they’re buying,” said Wood.

The 42-year-old, who also coined the term Web3, also founded the Web3 Foundation, which backs the reorganization of the web away from big companies such as Google owner Alphabet (GOOGL.O) to individual users.

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Reporting by Jessica DiNapoli; Editing by Alexander Smith

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G7 countries urge swift regulation of crypto assets – draft

Souvenir tokens representing cryptocurrency networks Bitcoin, Ethereum, Dogecoin and Ripple plunge into water in this illustration taken May 17, 2022. REUTERS/Dado Ruvic/Illustration

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KOENIGSWINTER, Germany, May 19 (Reuters) – The world’s top financial leaders called on Thursday for the swift and comprehensive regulation of cryptocurrencies following turmoil that has seen the demise of the Terra stablecoin last week, a draft communique showed on Thursday.

“In light of the recent turmoil in the crypto-asset market, the G7 urges the FSB (Financial Stability Board)…to advance the swift development and implementation of consistent and comprehensive regulation,” finance ministers and central bankers from the Group of Seven industrialised nations said in the document.

They were meeting in Koenigswinter, near Bonn (Germany), on Thursday and Friday.

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Reporting By Francesco Canepa and Jan Strupczewski; Editing by Angus MacSwan

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Japan asks crypto exchanges to act in line with sanctions against Russia

A man stands near an advertisement of a cryptocurrency exchange in Tokyo, Japan March 30, 2018. REUTERS/Toru Hanai/Files

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TOKYO, March 14 (Reuters) – Japan requested on Monday that crypto exchanges not process transactions involving crypto assets subject to asset-freeze sanctions against Russia and Belarus, officials said on Monday.

The request was made after a Group of Seven (G7) statement on Friday that said Western nations “will impose costs on illicit Russian actors using digital assets to enhance

and transfer their wealth.”

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There are growing concerns among G7 advanced economies that cryptocurrencies are being used by Russian entities as a loophole for financial sanctions imposed upon the country for invading Ukraine.

The U.S. Treasury Department issued new guidance on Friday that required U.S.-based cryptocurrency firms not to engage in transactions with sanction targets. read more

“We decided to make an announcement to keep the G7 momentum alive,” said a senior official at Japan’s Financial Services Agency. “The sooner the better.”

The government will work as one to strengthen measures against the transfer of funds using crypto assets that would be in violation of the sanctions, FSA and the Ministry of Finance said in a joint statement.

Unauthorised payments to targets under sanctions, including in crypto assets – such as cryptocurrency and non-fungible tokens – are subject to punishment of up to three years in prison or a 1 million yen ($8,487.52) fine, the FSA said.

There were 31 crypto exchanges in Japan as of March 4, according to an industry association.

($1 = 117.8200 yen)

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Reporting by Tetsushi Kajimoto, Daniel Leussink and Kantaro Komiya; Editing by Jacqueline Wong

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Cryptocurrencies in a time of war

A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken October 19, 2021. REUTERS/Edgar Su/

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LONDON, March 4 (Reuters) – Cryptocurrencies have been close to the headlines since Russia invaded Ukraine, with the ever-volatile bitcoin in demand in Russia and beyond.

Here are some charts that look at how cryptocurrencies have fared during the largest attack on a European country since World War Two.

CORRELATION CONUNDRUM

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Correlated or not? That’s long been the question for bitcoin , with the original cryptocurrency at times marching to the equity beat — and at other times not.

Bitcoin initially slumped after Russia launched its assault on Ukraine as investors dumped riskier assets, falling as much as 8% on Thursday before clawing back losses on the day. European stocks (.STOXX) fell 3.3% while the S&P 500 (.SPX) added 1.5%.

The paths of bitcoin and stocks have since entwined again, albeit to differing degrees.

Bitcoin jumped 14.5% on Monday in its best day in a year, and now stands up 12% since the day before the invasion began on Feb. 24. U.S. stocks have made smaller gains, with the S&P 500 (.SPX) edging up 3.3%. MSCI’s world index (.MIWD00000PUS) is down slightly.

“It’s still largely been correlated with U.S. equities throughout this crisis,” Joseph Edwards, head of financial strategy at crypto firm Solrise Group, said of bitcoin.

Cryptocurrencies during Russia’s war
Bitcoin and stocks

A SAFE HAVEN?

Crypto aficionados see bitcoin as “digital gold,” a handy place to store cash during war or disaster. Bitcoin, the argument goes, has a limited supply and runs on a global computer network beyond the reach of governments and is therefore safer than traditional currencies.

Things are never that simple. Bitcoin’s safe-haven chops are unclear: It often behaves more like risk-on assets such as stocks.

Investors say that during the war bitcoin’s characteristics have stoked demand and helped it outperform other traditional havens. Gold is up 2.6% while the U.S. 10-year Treasury yield has fallen 8.7% since last Wednesday.

Yet the moves may do little to settle arguments over bitcoin’s safe-haven credentials, analysts said.

“We don’t think BTC is being viewed as a safe haven, nor should be, but instead its appeal is it’s a supply capped, credit free, digital bearer asset that is proving to be a viable alternative to traditional finance in this current environment,” said Richard Usher at crypto firm BCB Group.

“If the situation continues to escalate and risk markets badly suffer it will struggle to rally further, but in our view still outperform.”

Bitcoin and safe havens

ROUBLE ROUTED, BITCOIN BOUNCES

Crypto trading in Russia has soared as the rouble was battered by Western sanctions which aim to squeeze Russia’s economy and sever it from the global financial system.

The Russian currency hit an all-time low of 118.35 per dollar on Thursday. read more

Trading volumes between the rouble and major cryptocurrencies hit 15.3 billion roubles ($140.7 million) on Monday, a three-fold jump from a week earlier, according to researcher CryptoCompare.

Rouble-denominated trades with Tether — a so-called stablecoin designed to keep a steady value — hit 3.3 billion roubles on Monday, their highest this year and almost five times more than a week earlier, the data showed.

The figures suggest that people are scrambling to covert savings to crypto in Russia.

The war has contributed to the narrative that bitcoin “is not just a speculative asset, it is also a seizure-resistant, policy-independent, longer-term store of value,” said Noelle Acheson, head of Market Insights at New York-based Genesis.

Sell roubles buy crypto
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Reporting by Tom Wilson and Elizabeth Howcroft; editing by Jonathan Oatis

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Russian c.bank proposes banning cryptocurrencies, crypto mining

MOSCOW, Jan 20 (Reuters) – Russia’s central bank on Thursday proposed banning the use and mining of cryptocurrencies on Russian territory, citing threats to financial stability, citizens’ wellbeing and its monetary policy sovereignty.

The move is the latest in a global cryptocurrency crackdown as governments from Asia to the United States worry that privately operated highly volatile digital currencies could undermine their control of financial and monetary systems.

Russia has argued for years against cryptocurrencies, saying they could be used in money laundering or to finance terrorism. It eventually gave them legal status in 2020 but banned their use as a means of payment.

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In December, the price of bitcoin fell after Reuters reported, citing sources, that Russia’s regulator was in favour of a complete ban on cryptocurrencies. read more

In a report published on Thursday, the central bank said speculative demand primarily determined cryptocurrencies’ rapid growth and that they carried characteristics of a financial pyramid, warning that bubbles in the market could form, threatening financial stability and citizens.

The bank proposed preventing financial institutions from carrying out any operations with cryptocurrencies and said mechanisms should be developed to block transactions aimed at buying or selling cryptocurrencies for fiat, or traditional currencies. The proposed ban includes crypto exchanges.

Russians are active cryptocurrency users, the central bank said, with an annual transaction volume of about $5 billion.

CRYPTO MINING

Russia is the world’s third-largest player in bitcoin mining, behind the United States and Kazakhstan, though the latter may see a miner exodus over fears of tightening regulation following unrest earlier this month. read more

The central bank said crypto mining created problems for energy consumption. Bitcoin and other cryptocurrencies are “mined” by powerful computers that compete against others hooked up to a global network to solve complex mathematical puzzles. The process guzzles electricity and is often powered by fossil fuels.

“The best solution is to introduce a ban on cryptocurrency mining in Russia,” the bank said.

In August, Russia accounted for 11.2% of the global “hashrate” – crypto jargon for the amount of computing power being used by computers connected to the bitcoin network.

In its report, the central bank pointed to steps taken in other countries, such as China, to curb cryptocurrency activity. It said it would work with regulators in countries where crypto exchanges are registered to collect information about the operations of Russian clients.

In September, China intensified its crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks.

Russia’s regulator said crypto assets becoming widespread would limit the sovereignty of monetary policy, with higher interest rates needed to contain inflation.

It said the long-term potential of cryptocurrencies being used for settlements was limited.

Meanwhile, the Bank of Russia is planning to issue its own digital rouble, joining the global trend to develop digital currencies to modernise financial systems, speed up payments and counter a potential threat from other cryptocurrencies.

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Reporting by Elena Fabrichnaya and Alexander Marrow; Editing by Emelia Sithole-Matarise

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