Russian Ministry of Finance submits regulatory framework for cryptocurrencies for review

In a new twist in the saga of cryptocurrency regulation in Russia, the country’s Ministry of Finance has unveiled an initiative that contrasts with the Central Bank’s tough position.

The Central Bank of Russia recently called for a nationwide ban on cryptocurrency mining and trading. Citing its volatility, environmental impact and use in illegal activities, the central bank released a report urging regulators to impose a total ban and severely punish offenders.

However, the proposal was rejected by the Russian Ministry of Finance. Days after the central bank called for the ban, Ivan Chebeskov, an official at the ministry, stated that the government should regulate cryptocurrencies instead of outright banning them. Chebeskov said authorities should give the industry a chance to develop and a total ban could leave Russia in the tech arena.

Russian Ministry of Finance submits regulatory framework for cryptocurrencies for review
Russian Ministry of Finance submits regulatory framework for cryptocurrencies for review

Thursday, RBC reported that the ministry sent a letter to Dmitry Chernyshenko, Deputy Prime Minister of the Russian Federation, and formally submitted a regulatory proposal to the government. The proposal introduces a new framework for the use of cryptocurrencies in the country, proposing that cryptocurrency operations be conducted within traditional banking infrastructure, with mechanisms for identifying traders’ personal information.

According to the ministry, regulating cryptocurrencies can bring several benefits, such as: B. higher tax revenues and improved ability of law enforcement agencies to track criminal activity.

The ministry cites statistics showing that Russian citizens own around 2 trillion Russian rubles worth of cryptocurrencies, adding that a total ban or lack of regulation will ultimately undermine the sector and create a black market.

The founder of Telegram, Pavel Durov also reacted negatively to the proposal to ban cryptocurrency. The tech executive said a ban won’t stop “unscrupulous players” but will hurt legal and compliant blockchain projects. He added that a ban will delay the development of blockchain-based technologies.

Meanwhile, the Russian President During a meeting with government officials, Vladimir Putin highlighted some advantages of cryptocurrencies. “We also have certain competitive advantages, especially in so-called mining,” Putin said. Later, the President called on the government and central bank to reach a consensus on the matter.

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