Russia joining India in regulating crypto rather than banning them.
The Russian government supported the cryptocurrency industry regulation concept proposed by the Ministry of Finance.
“The implementation of the regulations will ensure the creation of the necessary regulatory framework for crypto, it will bring the digital currency industry out of the shadows, and create the possibility of legal business activities,” the Russian government said in a statement.
Less than a month after Russia’s President Vladimir Putin called for unity over the cryptocurrency regulation dispute between the Bank of Russia and its Finance Ministry; the country is ready to recognize the nascent asset class as an alternative currency.
Local news outlet Kommersant reported today that both the Bank of Russia and the government had reached an agreement to see the country publish a draft bill on how cryptocurrencies will be regulated.
Per the report, the draft regulation, expected to be presented to the National Assembly by February 18, will see cryptocurrencies, including bitcoin and Ethereum, classed as an “analogue of currencies” rather than digital financial assets.
However, the report added that the distribution and circulation of cryptocurrencies would only occur through licensed intermediaries like banks.
Further details of the report reveal that cryptocurrency transactions of 6,000 rubles (appr. $8,000) and above within the legal sector must be declared to relevant authorities. In contrast, related transactions outside the jurisdiction will constitute a criminal offense.
Furthermore, fines will be introduced for the illegal acceptance of cryptocurrencies as a means of payment when the draft bill eventually becomes law.
“The purpose of the regulation is to integrate the mechanism for the circulation of digital currencies into the financial system and ensure control over cash flows in the circuit of credit institutions,” the Russian government said in a statement.
Previous Russian Crypto Regulation Efforts
Since last year, cryptocurrency regulation has been a significant topic of discussion in Russia.
The issue became more severe after the Bank of Russia called for a blanket ban on cryptocurrencies, stating that the asset class posed a major threat to its existing financial system. The Bank of Russia added that cryptos are primarily used to finance illicit activities, including money laundering and terrorist financing.
In contrast to the country’s apex bank motion, Ivan Chebeskov, a representative of Russia’s Ministry of Finance, called for regulation instead of a ban.
The argument prompted president Putin to weigh in on the matter, urging both parties to reach a consensus on crypto regulation for the country to benefit from the opportunities inherent in digital currencies, especially in mining.
Recently crypto became legal in India; India introduced a 30% tax on digital assets income and launched a digital Rupee.