Russian Finance Minister Favors Crypto Regulation Over Blanket Ban

17 February 2022, 09:34 GMT+0000
Updated by Kyle Baird
17 February 2022, 09:34 GMT+0000
In Brief
  • The Russian finance ministry does not favor banning the usage, trading, and mining of cryptocurrencies as advocated by the central bank, the Minister of Finance said.
  • Rather than banning cryptocurrencies, Finance Minister Anton Siluanov said his ministry believes they should be legalized and taxed.
  • According to Siluanov, the finance ministry and central bank have been debating cryptocurrency regulation for a year and a half.
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The Russian finance ministry does not favor banning the usage, trading, and mining of cryptocurrencies as advocated by the central bank, the Minister of Finance said.

Rather than banning cryptocurrencies, Finance Minister Anton Siluanov said his ministry believes they should be legalized and taxed. He stressed that banks and bourses should identify investors in the cryptocurrency market and broker for them. The finance ministry is expected to file its proposal on how to regulate crypto in Russia, which saw $5 billion in annual transactions, by the end of the week.

According to Siluanov, the finance ministry and central bank have been debating cryptocurrency regulation for a year and a half, adding that he hopes the government will help solve the crypto regulation dilemma and find a solution. “We will go to our superiors with these disagreements to try to solve the discords,” Siluanov said

Earlier this week, Bloomberg reported a letter from Siluanov to Prime Minister Mikhail Mishustin pushing for crypto legalization. He believes that removing the uncertainty surrounding cryptocurrencies can help improve the economy, and would also allow the government to monitor the asset class.

Bank of Russia crypto dissent

Previously, the Bank of Russia had suggested restricting crypto trading and mining over concerns of financial instability. However, the finance ministry promptly disagreed, resulting in President Vladimir Putin calling on authorities to find a consensus.

The Bank of Russia had previously spoken about the need for adjusting crypto regulation based on the experiences of other countries such as China. Last year, China launched a full-blown crackdown on cryptocurrencies, including a blanket ban on all crypto transactions and energy-intensive mining. “If we ban cryptocurrencies, then we need to ban the internet,” Siluanov said. “We don’t use the methods that China uses.” 

Meanwhile, Fitch Ratings remarked that a crypto ban would limit Russia’s financial system’s exposure to risk, however in the longer term could end up curbing innovation and hindering technological development.

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