Russian authorities are discussing two very different methods of regulating cryptocurrency and related activities. According to reports, although Russian banks are seeking to ban the purchase of crypto assets, legislators are working to effectively legalize cryptocurrencies through mining, trading, and taxation rules.

Russian officials debate alternative encryption regulations

Russian institutions, including the Central Bank and the State Duma, the lower house of parliament, are considering how to order the country’s growing crypto space. Anatoly Aksakov, chairman of the Duma Financial Market Committee, revealed that officials are now discussing “two diametrically opposed methods” to regulate cryptocurrencies-completely banning or legalizing crypto trading.

The Interfax News Agency quoted the senior congressman as saying that the focus of the negotiations is how to legally define new financial instruments and how to tax them. They should be finalized during the spring session of the Russian Parliament so that Russia can set clear rules for the 2023 tax year. Aksakov pointed out that the State Duma has already passed a draft law on the taxation of cryptocurrencies during first reading.

The new bill treats digital currencies such as Bitcoin as tax property and was submitted to the House of Representatives a full year ago. The delegates initially approved the draft in January 2021, when the Digital Financial Assets Law came into effect. In this regard, Pavel Krasheninnikov, Chairman of the Duma Legislative Council, emphasized when commenting on this matter that Russia needs to legalize cryptocurrencies before taxing them.

Anatoly Aksakov further explained that some of the regulatory proposals are very strict and envisage a total ban on the acquisition and possession of cryptocurrencies. Another method is to authorize the establishment of cryptocurrency exchanges and ensure that their operations are transparent to regulators, which will also make it easier for the Federal Revenue Service to tax their transactions.

Another area of ??concern is cryptocurrency mining. expand As an industry in the energy-rich Russian Federation.Aksakov has always been supporter The idea of ??registering mining as a commercial activity and taxing it.This move will also allow Russia to introduce higher electricity prices for mining companies, which now often use Subsidizing energy at household prices.

Russian banks want to ban cryptocurrency investments

At the same time, some media reported that the Central Bank of Russia (Community rehabilitation) Will seek to ban investment in cryptocurrencies on the grounds that they may pose a risk to the country’s financial stability. It stated that these risks are increasing with the popularity of encrypted transactions. Regulators have always been strong opponents of the legalization of cryptocurrency circulation in the Russian economy, often referring to assets such as Bitcoin as “Money agent,” and they acted as Means of payment.

Reuters quoted two sources in the Russian financial sector as saying that the monetary authorities are discussing with market participants and experts the possible prohibition of new purchases of encrypted assets. One of them, who did not want to be named, pointed out that if the restrictive measures are adopted, the previous acquisitions will not be affected. Another source close to CBR revealed that the central bank’s current position is to “completely reject” all cryptocurrencies.

When asked for comment, the Bank of Russia stated that it is now preparing a consultation report to show its position on the matter, but declined to elaborate. According to Russian media reports, working team The meeting on the regulation of cryptocurrency formed in the State Duma will begin in December, with the first review of the report prepared by the CBR.

In the recently released overview of financial stability in the second and third quarters of 2021, the Bank of Russia lead According to estimates by financial institutions, the annual digital currency transaction volume of Russian residents is about 5 billion U.S. dollars. The authorities warned that the cryptocurrency business “brings significant risks to financial stability and investors.”

Which regulatory approach do you want Russia to adopt in terms of cryptocurrency? Share your thoughts on this topic in the comments section below.

Lubomir Tasef

Lubomir Tassev is a tech-savvy journalist from Eastern Europe. He likes Hitchens’ famous quote: “Being a writer is my nature, not what I do.” In addition to encryption, blockchain and financial technology, international politics and economics Are the other two sources of inspiration.