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Russian Finance Ministry Submits Crypto Proposal but Central Bank Not Satisfied

2 mins
Updated by Ryan Boltman
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In Brief

  • Russia’s finance ministry submitted legislative proposals for cryptocurrency regulation to the government, which the Bank of Russia reportedly takes issue with.
  • The central bank opposes the ministry's proposals for legalization and maintains an insistence on banning the issuance and circulation of cryptocurrencies.
  • Finance Minister Anton Siluanov said he hoped that any disagreements could be worked out so that a bill regulating cryptocurrencies could be passed by the end of the year.
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Russia’s finance ministry submitted legislative proposals for cryptocurrency regulation to the government, which the Bank of Russia reportedly takes issue with.

According to a document sent to the finance ministry, the central bank opposes the ministry’s proposals for legalization and maintains an insistence on banning the issuance and circulation of cryptocurrencies. 

However, Finance Minister Anton Siluanov said he hoped that any disagreements could be worked out so that a bill regulating cryptocurrencies could be passed by the end of the year. Ultimately, he said the government would make the final decision.

As part of the submitted proposals, Siluanov said his ministry would identify crypto traders, designating them between a “white” market and a “grey” market. The ministry would also give law enforcement the power to trace money flows and transactions, potentially diminishing appeal for the more privacy minded.

Earlier this week, Bloomberg reported that Siluanov had sent a letter to Minister Mikhail Mishustin pushing for crypto legalization. He stated that removing the uncertainty surrounding cryptocurrencies can help improve the economy, and would also allow the government to monitor the asset class. Siluanov had earlier remarked that the finance ministry and central bank had been debating cryptocurrency regulation for a year and a half. 

Bank of Russia’s resistance

The Bank of Russia believes that regulating cryptocurrencies is infeasible and proposed restricting trading and mining over concerns of financial instability. The bank has previously blamed cryptocurrencies’ rapid growth on speculative demand, warning of potential bubbles in the market. 

When the bank proposed the ban last month, the finance ministry was quick to rebuke. This spurred President Vladimir Putin to call on authorities to find a consensus. Authorities were later reported to have agreed on a roadmap, which ultimately still lacked the support of the central bank.

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Nicholas Pongratz
Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.
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