Russia has dropped plans to criminalize bitcoin transactions for now, according to local media reports.

The Digital Financial Assets Bill (DFA), due to be read for the second time in the Russian parliament or State Duma on July 21, has removed references to administrative and criminal liability for dealing in bitcoin (BTC). A third and final reading will establish it as law.

There will be no liability in this bill, Anatoly Aksakov, head of the parliaments financial markets committee, told local news agency Ria Novosti. Aksakov, who is sponsoring the draft law, said the idea to penalize BTC investors with fines and jail terms had been set aside for the time being.

Theyve removed everything, theres only a link that the regulation of digital currency will be determined in another law, he stated.

An earlier version of the DFA bill proposed to levy fines of up to $7,000 or seven years in jail for individuals buying bitcoin with cash. It also planned to punish companies that issue or operate virtual currencies without approval from the Russian central bank, with fines of up to two million rubles or about $28,000.

Under the original bill, companies would have to pay the equivalent of one million rubles ($13,900) and individuals at least 200,000 rubles ($2,800) for violation of the rules for transactions with cryptocurrencies, if they are used as payment for goods or services.

According to Aksakov, the revised draft law, in its current format, now deals with issues around the definition of digital financial assets and establishes requirements for blockchain operations, among other matters.

He expects the proposed law to enter into force on January 1, 2021, once it is adopted in the second and third readings, in the spring session. The State Duma spring session ends July 23, Ria Novosti reported.

However, Russian lawmakers are planning another special law on crypto regulation that might reintroduce severe penalties for dealing in BTC, as originally proposed.

There will be a special law on digital currency, which can be adopted in the autumn session, Aksakov was quoted as saying. The autumn session ends in December.

Cryptocurrencies remain a grey area in Russia, with the legal status of smart contracts, initial coin offerings and mining not clearly defined despite a raft of proposals brought to parliament for this purpose.

What do you think about the Russias proposed crypto law? Let us know in the comments section below.

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Russia Shelves Plans to Criminalize Bitcoin Transactions - For Now | Regulation - Bitcoin News