The lower house of the Russian parliament – the Duma, is seemingly feeling the effects of the sanction against it for entering Ukraine, as legislators passed a bill on the taxation of digital assets that exempts their sale from value-added tax (VAT) in the Russian Federation.
According to RIA Novosti, other crypto services would also fall under the tax exemption list.
The Russian Duma also introduced income tax rates of 13% for Russian exchanges for the first 5 million rubles (U$93,000) of the taxable base annually and a 15% tax on amounts above that limit. The switch comes in contrast with the 15% across-the-board rate for foreign exchanges and the 20% tax that companies pay.
The bill also sets digital asset taxing to be just like securities taxes, with regulators claiming that such a bill can be a stepping stone for making an effective and competitive digital economy in the biggest country in the world.
Feeling the pressure
Russia finally started to feel the consequences of the unprecedented economic isolation that Western economies imposed on Russia. The sanctions are so severe, that Russia reported a default on foreign debt servicing Monday.
The sanctions list includes Russia being expelled from the SWIFT cross-border remittance system, as well as G7 countries banning the purchase of newly mined and refined Russian gold. Also, freezing the Russian foreign bank accounts effectively removed a third of Russia’s economy.
With the bill passing by the Russian Duma, it is clear that the Motherland is heading on a course towards digital assets, especially since Sberbank is preparing to launch a stablecoin. Furthermore, the Russian Central Bank's first deputy chair Olga Skorobogatova stated in an interview that trials of a digital ruble will be moved up from 2024 to April 2023, with a pilot program underway.
“I think all self-respecting states will have a national digital currency within three years. […] We should be ready as soon as possible. Plus, this will settle the issue of being blocked from SWIFT, because this integration will make SWIFT unnecessary,” Skorobogatova stated.
Russia and crypto prices
The news about the bill did not affect the recline the crypto sector is seeing, with most of the crypto projects essentially erasing the gains from the past week’s bullish consolidation.
Bitcoin, for example, is flirting with the $20,000 support zone, with a current price point of $20,086.45 per BTC. If Bitcoin fails to hold on to the pressure, experts are claiming another dive for the crypto economy.
Ethereum has also erased its weekly gains, with the altcoin leader back to its 7-day starting point at $1,112.23 and a weekly high of $1,272.13. However, weekly trading volumes are up, meaning that the second-largest crypto to date may find support near its current price better than Bitcoin.
The rest of the crypto sector is behaving similarly, with only Polygon (MATIC) keeping a 20% weekly price increase.