Since January 1 of last year, cryptocurrencies have been legal in Russia, however they cannot be used to purchase goods or services.
Russia recently enacted a new cryptocurrency law that, although falling short of the previous cryptocurrency prohibition, nonetheless maintains rigorous limits on the usage of cryptocurrencies as a form of currency.
Fast forward 16 months, Moscow takes a different approach and will add cryptocurrency to its financial infrastructure.
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‘Sooner Or Later’
Industry and Trade Minister Denis Manturov stated on Thursday that Russia will “sooner or later” legalize cryptocurrencies as a form of payment, indicating that the government and central bank may be coming closer to a resolution.
Moscow has announced plans to establish a central bank digital currency, but has discouraged the usage of private cryptocurrencies until lately.
There may be some progress being made by the government and central bank, says Manturov (Bitcoin News).
Elvira Nabiullina, the governor of the Russian central bank, has recently said the bank cannot accept cryptocurrency investments, which account for approximately $5 billion in annual transactions by Russians, and has recommended prohibiting their trading and mining.
However, according to Manturov, the government and central bank may be moving closer to resolving their dispute.
Prior to Russia’s invasion of Ukraine on February 24, the finance ministry proposed legislative measures that were incompatible with the central bank’s desire for a complete ban.
Russia Moves Towards Making Crypto Legal
At a forum, Manturov was asked if he believed cryptocurrencies will become legal as a form of payment.
Manturov responded, “The question is, when this occurs, how it will be regulated, given that the central bank and government are actively working on it.”
“However, the general consensus is that… sooner or later, this will be implemented in some form,” the Russian official explained.
Crypto total market cap at $1.24 trillion on the daily chart | Source: TradingView.com
Since 2020, Russian banks have been permitted to create cryptocurrency exchanges under the supervision of the central bank, and new digital currencies can be minted, but only under the supervision of the central bank.
This demonstrates a more practical approach to cryptocurrencies and their acceptance in Russia compared to what some had projected would be a near-total moratorium on cryptocurrency activities in the nation.
Moscow intends to launch its own digital rouble, but the Kremlin has only lately come around to backing the usage of private cryptocurrencies after arguing for years that they could be used to launder money or fund terrorists.
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Other central bank officials stated last year that they did not see a place for cryptocurrencies in the Russian financial market, citing threats to financial stability posed by the growing number of crypto transactions.
Featured image from CoinLive, chart from TradingView.com