- Bank of Russia proposed a ban on cryptocurrency trading, use, and mining
- The government and the Bank of Russia have agreed on a future regime for crypto circulation
- People who accept crypto as a means of payment will have to pay a fine
Russia might soon join the ranks of countries recognizing cryptocurrency as a form of currency. The Bank of Russia and the government have reached an agreement on regulation, CNBC reported, citing local media.
Russia proposed a ban on crypto weeks earlier
The development comes weeks after Bank of Russia proposed a ban on cryptocurrency trading, use, and mining. Russian citizens and residents will only be allowed to hold crypto if this law comes into force, local media reported.
On Twitter, Russian newspaper Kommersant posted the following and also published a related report:
The government and the Bank of Russia have agreed on a future regime for the circulation of cryptocurrencies in Russia. Before February 18, they will prepare a draft law on the circulation of digital currencies in the Russian Federation, in which cryptocurrencies are recognised as an analogue of currencies, and not digital financial assets.
The report informs that cryptocurrencies will not be allowed to circulate without full identification through the banking system or licensed intermediaries.
Russia legalized crypto in 2020, but didn’t authorize it for payment use
While Russian authorities conferred legal status upon cryptocurrencies in 2020, they never authorized them as a method of payment. Russia has been calling for regulation for years, expressing concerns that crypto can be used for illegal activities, of which there is no shortage.
A report published by the Bank of Russia at the time stated:
The use of cryptocurrencies creates significant threats to the well-being of Russian citizens and the stability of the financial system.
By February 18, Bank of Russia and the Ministry of Finance must either draw up a separate bill or amendments to the law on digital finance assets for predictions to come true. In the first half of 2022, part of the new regulation on digital currencies could be enforced. This might be postponed until 2023 according to the Kommersant report.
Possession and trade of crypto is still allowed
People are still allowed to possess or trade cryptocurrencies in the country, but only through the organizer of the digital currency exchange system. This is a p2p exchange with the right to operate in Russia or a bank with a universal license, the report added.
Crypto transactions of 8K or more are illegal
The report also suggests that crypto transactions in an amount exceeding 600,000 rubles will be against the law. This corresponds to around $8,000 at effective exchange rates. Moreover, people who accept crypto as a means of payment will have to pay a fine.
