Cryptocurrency is allowed to pay in FEA?
Background
Digital rights can now be used for settlements in foreign economic activity (FEA) - this follows from new law (Federal Law No. 45-FZ of 11.03.2024).
However, this news should not mislead businesses: digital rights are not cryptocurrency. The legislation still does not provide for settlements in cryptocurrency.
Digital rights and digital currencies - what's the difference
Digital rights and digital currencies have the same technological basis - they exist thanks to blockchain technology, but their legal status in Russia is completely different. Digital rights in Russia exist in the form of DFAs and UDRs:
- Digital financial assets (DFA) - digital rights issued, accounted for and traded in information systems, which include:
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monetary claims,
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the ability to exercise rights under equity securities,
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rights to participate in the capital of a non-public JSC,
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the right to demand transfer of equity securities.
There are several known issues of DFA (see the website dfa.rf): Gazpromneft issued in the form of DFA for 100 million rubles at 13% per annum; Russian Railways - for 15 billion rubles (essentially bonds).
- Utility Digital Rights (UDR) are another type of digital rights. They are traded on an investment platform and give the holder the right to demand from their issuer:
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transfer of things;
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transfer of exclusive rights to the results of intellectual activity (RIA) (e.g. patents) and/or the rights to use them;
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performance of work and/or provision of services.
In general, these are crowdfunding projects - UDRs are acquired in exchange for some future product or service. We are not aware of any large-scale issues of UDR.
- Digital currency - this term refers to the well known cryptocurrencies. The most important thing that can be said about digital currency is that:
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Russian companies,
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individuals who are tax residents of the Russian Federation,
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a number of other persons
are not entitled to accept digital currency as payment for goods, works, services.
It should be noted that digital currencies do not include the digital ruble, as well as any other monetary units - this directly follows from the definition of digital currency in the legislation.
Thus, the legislator allowed the use of digital rights as a means of payment in foreign economic activity, but since digital currency (cryptocurrency) does not refer to digital rights, the changes did not affect cryptocurrencies.
Changes
If we summarise all the changes, the legislator has established that **DFA and UDR may be used as a means of payment under FEA contracts **between residents and non-residents that provide for:
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transfer of goods,
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performance of work
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rendering of services,
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transfer of information and RIA, including exclusive rights to them.
All other changes are mainly aimed at extending the currency legislation norms to these digital rights.
Are there prospects for business and participants in foreign economic activity
Currently, the prospects for the use of digital rights in FEA are vague. Companies from "unfriendly" countries may be deterred by digital rights issued by "sanctioned" companies (which are usually the ones that have issued DFAs in the past).
As for companies from other countries, in addition to the risk of secondary sanctions, they may also be confused by the limited liquidity of digital rights: few people usually pay with shares or bonds for goods.
A more promising approach to FEA could be partial authorisation of cryptocurrencies - in particular, this is envisaged in one of the recent draft laws proposing to classify stablecoins as DFAs: a cryptocurrency that is "pegged" to the value of an asset (the draft law speaks of stablecoins "pegged" to the value of gold).
However, there are doubts about the prospects of this bill, given the government's current approach to cryptocurrencies in general.
MAGENTA Legal lawyers have many years of experience in advising in the sphere of foreign economic activity (FEA), including issues of compliance with the legislation on currency regulation and currency control. For more than 10 years of our practice, none of our clients has been brought to administrative responsibility for violation of currency legislation in any of our projects. Managing Partner Anton Shamatonov is a recommended lawyer in the field of foreign trade (according to the authoritative rating of law firms PRAVO-300 2019, 2020, 2021).