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Regulation

Russian ministry proposes to amend law banning crypto transactions

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Authorities in Russia continue the game of ping pong in regulating cryptocurrencies like Bitcoin (BTC) even after passing the country’s first crypto law.

Russia’s Ministry of Finance has reportedly proposed a set of amendments to the law “On Digital Financial Assets,” or DFA, which bans many operations with crypto.

According to local news agency Izvestia, the proposed amendments envision a “blanket ban on any operations with virtual money for individuals and individual entrepreneurs” except for three scenarios. The ministry reportedly wants to ban all crypto transactions except the obtaining of assets through inheritance, bankruptcy and enforcement proceedings.

The amendments reportedly intend to prohibit miners from receiving payment for cryptocurrency mining. “Standalone crypto mining is legal, but it loses its financial value because the payment is usually processed in Bitcoins and Ethers,” Izvestia reports.

The latest news brings even more confusion to Russia’s current legal situation with crypto. After Russia finally passed its DFA bill in July 2020, local authorities subsequently said that the regulation will be set out in another law referred to as the bill “On Digital Currency,” or DA. While the DA bill is expected to pass in late 2020, the DFA law is scheduled to be adopted in January 2021, banning crypto-denominated payments in Russia.

In late August 2020, Russia’s telecom regulator Roskomnadzor blocked the country’s largest crypto-related website, BestChange.ru. Providing an aggregator of about 400 local crypto exchange websites, the platform was reportedly said to distribute information about buying or selling products with cryptocurrencies like Bitcoin. BestChange claims to have never provided any information about such services.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.