Russian authorities have voiced different opinions on crypto regulation during the past months, some of them calling for an integration into the legal system while others suggested an outright ban. Now, President Vladimir Putin is asking for consensus on cryptocurrency policy between the conflicting approaches by the authorities.
During a recent government meeting, Putin requested that the Ministry of Finance and the Central Bank to “come to some kind of consensus” on banning or regulating cryptocurrencies in Russia. According to the Presiden, the Bank of Russia is supposed to deal with these issues and regulate them. Putin thinks the central bank should not stand in the way of regulatory progress and make the necessary efforts to introduce new technologies into this sphere of activity.
Conflicting approaches
Last week, in a paper discussing the role of cryptocurrency in the Russian financial sector, the Russian Central Bank proposed a ban on its usage, trading and mining. In addition to being volatile, the paper said cryptocurrencies frequently facilitate criminal operations like fraud and money laundering. Consequently, the paper recommended new legislation and regulations that would prevent any crypto-related business in the country.
However, earlier this week representatives from the Ministry of Finance countered this perspective, instead believing that regulations, not restrictions, are needed. Speaking at the RBC-Crypto conference, director of the financial policy department of the Ministry of Finance, Ivan Chebeskov criticized the prospective blanket-ban, saying it would contribute to Russia’s technological stagnation. He subsequently revealed that the finance ministry had prepared a concept for regulating the industry. Details include carrying out all crypto transactions through Russian banks, identifying crypto wallet holders, and classifying digital asset investors as either qualified or unqualified.
Crypto in Russia
Cryptocurrencies have been a controversial subject in Russia for many years. While the government has warned of illicit uses for cryptocurrencies, it eventually gave them legal status in 2020, but banned their use as a means of payment. However, cryptocurrencies in Russia have surged in popularity, with an estimated 7% of the Russian population owning cryptocurrency, according to Konstantin Shulga, CEO of digital financial marketplace Finery Markets.
Meanwhile, Russia has also been accounting for an increasing percentage of the global hash rate, up to 11.2%, following China’s ban on cryptocurrency mining last year. During the recent government meeting, Putin acknowledged that Russia was well-suited for the practice.
"We do have some competitive advantages here, especially in so-called mining. I am referring to surplus electricity and the well-trained personnel available in the country." - Vladimir Putin
