According to the Russian Tax Code, which came into effect in January 2021, cryptocurrency holders are subject to taxation if they conduct transactions totaling more than 600,000 rubles per year (approximately $8,000).
The rise in Bitcoin prices may trigger growth in the shadow economy.
Anton Gorelkin, a member of the Information Policy Committee, believes that the increase in cryptocurrency prices has created favorable conditions for attracting individuals to the sector. In his Telegram channel, he stated that the surge in Bitcoin prices will attract many new investors, including from Russia.
Indeed, according to data from Paxful, the number of cryptocurrency users surged by 45% during 2020, and this trend continues to rise. In the first week of February this year, the total transaction volume exceeded 16 million rubles (approximately $217,000), surpassing any comparable previous period.
Gorelkin argues that such increased interest could provoke a rise in the shadow economy and tax evasion. For this reason, the State Duma is considering lowering the threshold to include a greater number of cryptocurrency taxpayers.
Overall, the Russian government continues to take a cautious approach towards cryptocurrency, asserting that digital assets are tools for illegal operations.
According to a report by Chainalysis, Russia leads the world in the cryptocurrency adoption index. Furthermore, the country is also notable for having the highest number of transactions involving digital assets conducted by its citizens domestically. Therefore, even if the government decides to adjust the taxation threshold, it is unlikely to halt the growth of the sector. Its flourishing seems inevitable.
