As per reports by several media houses, sooner or later Russia to legalize crypto as an avenue of payment. This statement was released by the Industry and Trade Minister Denis Manturov on Wednesday, recommending that the governing body and the central bank of the country may be shifting closer to resolving their differences. Let us have a look at some of the Russian crypto news.
Russia To Legalize Crypto In Recent Times
Shortly prior to Russia sending numerous troops into Ukraine on 24 February 2022, the finance ministry of the country submitted a legislative appeal that collided with the demand of the central bank for a blanket ban on crypto. There were many talks regarding this Russian crypto ban.
The Industry and Trade Minister was asked at a forum whether he thought digital currency would become legal as an avenue of payment on his proposal for Russia to legalize crypto and soon we will hear news of Russia accepts Bitcoin. On the query, he answered,
“I think so. The question is when this will happen, how it will happen, and how it will be regulated. Now both the Central Bank and the government are actively engaged in this. But everyone is inclined to understand that this is a trend of the time, and sooner or later in one format or another, it will be carried out.”
He further added that,
“But, once again, it must be legal, correct, in accordance with the rules that will be formulated.”
Talking about Russia to legalize crypto, we should also mention that Russia has a plan to create its own CBDC (Central Bank Digital Currency), but the Russian government has recently started to support the use of private digital currencies having debated for years that these cryptos could be used in unlawful activities and also in money laundering or to finance terrorism.
However, Central Bank Governor Elvira Nabiullina has stated the bank cannot allow investments in digital currencies, which account for nearly $5 billion worth of transactions each year by Russians, and has appealed for banning crypto mining and trading.
Stating about the risks to financial stability from the increasing number of digital currency transactions, other central bank officials stated that last year they did not see space for digital currency to be used in the Russian financial space.
Manturov notified that regulations for the utilization of digital currencies would in the first stage be formulated by the central bank, and then will be taken forward by the government.
Russia To Legalize Crypto: Previous Drafts
The Russian government and the central bank of the country have attained an agreement to amend existing laws or draft legislation identifying crypto as a type of currency, as per a statement released by the government on 8.02.2022.
The agreement is a prominent reversal after the Bank of Russia in January proposed imposing a ban on miners and various other crypto operations over issues that could endanger the financial system of the country.
The regulation of Russia will seek to include a system for the circulation of cryptos into the financial system of the country while assuring control over cash flows of the credit institution, an approximate translation of an accompanying draft document states. It says,
“The establishment of rules for the circulation of cryptocurrencies and control measures will minimize the threat to the stability of the financial system and reduce the use of cryptocurrencies for illegal purposes since a complete ban on the segment of operations related to their circulation is impossible.”
The use of Crypto as a currency will only be evident following effective identity checks through the banking system of the country or licensed third parties, while functions exceeding 600,000 rubles ($8,016) must be announced, as per the document.
Transacting outside those proposed legal parameters will be considered a criminal offense, and fines are expected to be introduced for the illegal acceptance of cryptos as a means of payment.
Officials also stated that regulation would assure the protection of the rights of the citizens under a licensing regime focused on the provider of digital currency. Providers will be required to have “financial airbags” with respect to adequate and liquidity capital. The document reads,
“The complete absence of regulation of this industry, as well as the establishment of a ban, will lead to an increase in the share of the shadow economy, an increase in fraud cases, and destabilization of the industry as a whole.”
There are added plans to bring in an “obligation” for market players to educate the citizens of Russia regarding the hazards related to virtual assets. Various Russian lawmakers and regulators that including the Ministry of Finance, the Ministry of Internal Affairs, the Federal Security Service, the Federal Tax Service, and other departments were associated with the decision-making procedure. The statement further read,
“The implementation of the concept will ensure the creation of the necessary regulatory framework, will bring the digital currency industry out of the shadows and create the possibility of legal business activities.”
Since 1st January 2021, digital currencies have been termed legal in Russia, however, cryptos cannot be used to buy services or goods. Russia in recent times enacted a new cryptocurrency claiming that sooner or later, Russia to legalize crypto, considering various safety parameters for the citizens. Now we will have to wait and see the latest crypto updates.