Russia Won’t Ban Cryptocurrencies, Will Regulate Them Instead

After going back and forth on how to deal with digital assets for months, Russia’s government and the nation’s central bank have decided to draft a bill on recognizing them as an analog of currencies. The authorities have until February 18th to present the draft.

• The world’s largest country by landmass has had a rather indecisive approach towards the cryptocurrency industry dating a few years ago.
• Most recently, some of the governing bodies had disputes on how to tackle them. On the one hand, Russia’s central bank proposed a total ban on anything crypto, citing the enhanced volatility that could threaten the country’s financial system.
• On the other, though, the nation’s finance ministry preferred a softer approach by implementing regulations instead of a ban.
• As per a report by local newspaper Kommersant, the authorities have decided to take the second approach and will prepare a draft law, by February 18th, to definite crypto as “an analog of currencies,” instead of a digital financial asset.
• According to a government statement, the purpose of this regulation is to integrate digital currencies into the financial system and “ensure control over cash flows in the circuit of credit institutions.”
• Digital asset transactions will be possible only through legalized intermediaries, such as exchanges and P2P platforms, and banks. They will require complete identification.
• The early stages of the draft law suggest that all crypto transactions of over 600,000 rubles (about $8,000) will have to be declared or risk being labeled as a criminal offense.
• It’s worth noting that the country’s president – Vladimir Putin – seemed in favor of regulations instead of a ban as well and backed crypto mining.
• Russia’s population is among the most active on the crypto market, with recent Kremlin estimations showing that they own over $200 billion worth of digital assets.