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The Ministry of Finance has proposed a regulatory framework that would allow cryptocurrency transactions to be carried out through the Russian banking system, with the infrastructure to monitor and identify merchants.
Crypto Regulations Instead of Ban
According to a report by local media outlet RBU on Friday (January 27, 2022), the Ministry of Finance is proposing a modality that would see cryptocurrency transactions in Russia be done through traditional financial institutions. As part of the proposal, the Department of Finance wants robust client identification protocols to support regulated virtual currency transactions across the country.
There were earlier reports that Russia’s central bank was calling for a complete ban of the cryptocurrency industry in the country. In addition to labelling the sector as a pyramid scheme, the bank at the summit said digital assets threaten financial stability and sovereign monetary policy.
The Bank of Russia also touched on the extraction of cryptocurrency, arguing that this energy-intensive activity was contrary to Russia's green agenda. Interestingly, crypto-mining activities thrive in the country, being the third largest mining centre after the United States and Kazakhstan.
However, Ivan Chebeskov, who works in the Ministry of Finance as head of the Department of Financial Policy, opposed the proposed general ban on cryptography. According to the grievor, regulating the industry was a better course of action.
Chebeskov also said that the Ministry of Finance has already prepared a regulatory framework and introduced it to the machinery of government. The official added that the world was becoming "virtualized" and it was important for the russian government to create an enabling environment for such technologies as crypto for development.
In the grievor's opinion:
'Here you have to give a chance to develop these technologies (mines, etc.). In this regard, the Department of Finance is actively involved in the development of legislation to regulate this market."
Crypto Mining receives Putin's Sign.
As the central bank continues to maintain a tough stance against crypto, Russian President Vladimir Putin has recently offered some support from cryptocurrencies, especially the mining sector. As previously reported by CryptoPotato, Putin has argued that Russia stands to gain some “competitive advantages” from allowing crypto mining activities.
According to Bloomberg, some government sources have claimed that Putin is keen on regulated crypto mining that will utilize the country’s excess electricity supply. Russia is the third world destination for cryptocurrency mining after the United States and Kazakhstan in terms of hash rate distribution.
