Russia now wants to regulate cryptocurrencies

After the Central Bank wanted to ban crypto-currencies from the country, a draft law now plans to treat them the same as foreign currencies.

Has Russia decided to do an about-face on cryptocurrencies? It would seem so according to information from Kommersant, a Russian media outlet relayed by PhonAndroid. However, at the end of January, as Capital reported, the Russian Central Bank had decided to ban them in order to "reduce the threats caused by their propagation". It had published a report specifically proposing a ban on "mining", investments and payments in cryptocurrencies. According to the Bank of Russia, they would threaten "the well-being of Russian citizens and the stability of the financial system".

But everything seems to have changed in a few weeks. The government and the Central Bank have reportedly agreed on a draft law to regulate digital assets and the "future mode of circulation of cryptocurrencies in Russia". The considerable number of cryptocurrency wallets in the country (12 million) would have prompted the government to take them into account. Thus, according to our confrères, the draft law, which is already underway, plans to consider them in the same way as foreign currencies.

A supervised use

So whether it's Bitcoin, Ethereum, USDC or Binance Coin... all would be regulated in the same way as the euro or the dollar. According to PhonAndroid, which cites information from Kommersant, a mechanism aimed at limiting abuse should be put in place in the draft law under preparation. Thus, "transactions worth more than 600,000 rubles (7,000 euros) will have to be declared". In a 2020 study, Russia was ranked second among countries using cryptocurrencies behind Ukraine and ahead of Venezuela. The Central Bank then put the volume of transactions in 2019-2020 at five billion dollars.

The Russian secret services, who wanted a ban on cryptocurrencies, were obviously not heard. This about-face is similar to the one in India, where the government introduced a bill in November to ban private cryptocurrencies, but a few days ago the Indian Ministry of Finance introduced another one to tax cryptocurrency transactions at 30%, PhonAndroid recalls. Last September, El Salvador became the first country to allow Bitcoin as a legal tender despite criticism from economists.