The Russian government and the Central Bank need to reach a consensus regarding the regulation of the cryptocurrency market.
This was announced on Wednesday, January 26, by President Vladimir Putin during a meeting with members of the Cabinet.
“I would ask both the Russian government and the Central Bank to come to some kind of unanimous opinion during the discussion and I would ask you to hold this discussion in the near future, and then report on the results that will be achieved during this discussion,” instructed head of state.
According to him, the issue of regulating the digital money market is now in the spotlight.
At the same time, the Russian leader noted that he was familiar with the ongoing discussion on this matter.
As the president emphasized, the Central Bank does not stand in the way of technical progress and is making the necessary efforts to "introduce the latest technologies in this area of activity."
At the same time, Central Bank experts see the risks of the spread of cryptocurrencies, primarily for the citizens of the country, Putin added.
“Although, of course, we also have certain competitive advantages here, especially in the so-called mining.
I mean a surplus of electricity and well-trained personnel available in the country,” Vladimir Putin said.
Earlier, the Central Bank announced possible measures to tighten regulation of the cryptocurrency market in Russia.
In particular, the regulator proposed to introduce a complete ban on the mining, issuance and exchange of digital money, as well as to block any transactions with electronic coins using the country's financial infrastructure.
In addition, the Central Bank considers it necessary to prohibit banks from investing in cryptocurrency.
For purchases in digital money and for violation of other prohibitions, the regulator proposes to introduce liability for Russians and Russian legal entities in the form of fines.
As the Central Bank explained its initiative, the cryptocurrency industry poses significant threats to the well-being of people and the financial system of the country.
At the same time, the Bank of Russia noted the high risks of expanding illegal activities using digital money.
At the same time, the Ministry of Finance opposed the ban on cryptocurrencies in the country.
As Ivan Chebeskov, director of the department’s financial policy department, stated, it is necessary to ensure the regulation of the industry and develop blockchain technology.
This, in his opinion, will help ensure market transparency, protect citizens from risks, and also avoid the outflow of specialists abroad.
“We need to give these technologies the opportunity to develop.
In this regard, the Ministry of Finance is actively involved in the development of legislative initiatives in terms of regulating this market.
We have a prepared concept of regulation, which we are discussing within the Ministry of Finance, and now it has been sent to the government apparatus, ”Chebeskov said.
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It is noteworthy that Russia is one of the leading players in the global cryptocurrency market.
According to the Central Bank, the volume of transactions with digital assets made by Russians annually is about $5 billion, and the share of Russians on some crypto exchanges exceeds 14%.
Moreover, in August 2021, Russia ranked third in the world in terms of bitcoin mining, and today the country accounts for 11.23% of computing power.
“Now the Central Bank proposes to completely ban the crypto industry in the country and conduct transactions with electronic coins only in foreign jurisdictions.
That is, the Central Bank, in fact, is forcing businesses to go abroad, which means the loss of additional tax deductions to the budget and jobs, ”Yuri Pripachkin, president of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (RAKIB), told RT.
“Certain restrictions, of course, are needed, but the industry cannot be completely banned.
What is needed is regulation.
The head of state understands this very well and therefore, like us, stands for dialogue,” he stressed.
Digital Perspectives
According to Pripachkin, a special working group has already been created in the State Duma to discuss the topic of cryptocurrencies.
Against this background, according to the expert, in the foreseeable future, the issue will still be resolved, taking into account the views of all parties.
“We believe that the industry should develop based on foreign experience, which has already proven its effectiveness.
In particular, the special services have a mechanism to control the sphere.
For example, Rosfinmonitoring has a so-called transparent blockchain, with which you can control the situation and prevent illegal actions,” said Yuri Pripachkin.
As EXANTE analyst Vladimir Ananiev suggested in a conversation with RT, Russia can bring mining into the legal field.
If the relevant legislation is adopted, the country is able to become a “point of attraction” for miners from all over the world due to relatively inexpensive electricity.
This, in turn, should have a positive impact on the replenishment of regional budgets, the expert believes.
According to him, it will be impossible to pay with cryptocurrency for goods and services in Russia in any case.
As the specialist emphasized, the ruble remains the only legal monetary unit in the country, and the introduction of cryptocurrency regulation will not be able to affect this.
“The question is what will ultimately be decided with transfers to crypto exchanges.
Obtaining a certain licensed status by crypto exchanges will give a chance to apply Russian legislation to them: it will be possible, on the one hand, to agree that the exchanges protect unqualified investors from derivative instruments, and on the other hand, to obtain from the exchanges the transparency necessary for taxation, ”concluded Ananiev.