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Russian Central Bank and Finance Ministry to resolve crypto policy differences

Policy harmonization can help create a more stable and transparent regulatory environment for investors and entrepreneurs.

Date: 2024-03-25 Author: Łukasz Michałek
Russian Central Bank and Finance Ministry to resolve crypto policy differences

The Russian Finance Ministry says it wants to resolve long-standing differences over cryptocurrency policy with the country’s Central Bank .

According to RBC media, Finance Minister Anton Siluanov said he is “confident” that his ministry and the bank will soon “come to an agreement” on issues related to cryptocurrency regulation.

Russian Central Bank eager to break cryptocurrency impasse?

Speaking at an event held at the state financial university, Siluanov said:

“I am sure that [the ministry] and the Central Bank will come to an agreement. This issue has been discussed for several years. We can’t ban the trading of cryptocurrencies. Therefore, we need to regulate this [market]. I’m sure we will find a solution.”

The Finance Ministry and the Central Bank have been stuck in an unproductive impasse over crypto policy for years. The government agency wants to regulate and tax cryptocurrency exchanges and traders, but the bank has previously called for a complete Chinese-style ban.

The ministry has been trying to break the deadlock since early 2022, when it unveiled a comprehensive bill to regulate cryptocurrencies.

The bank responded with its own competing bill, proposing a near-total ban on all cryptocurrency-related activity. Neither bill made it past the committee stage in the State Duma, and the cryptocurrency sector has remained in limbo ever since.

This led to last month’s downgrade of the country’s FATF compliance rating and calls by government bodies for accelerated regulation. However, the war in Ukraine and the resulting Western sanctions appear to have forced the Russian Central Bank to act.

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The bank has reluctantly agreed to soften its stance on industrial cryptocurrency mining, which is currently booming in Russia. It also agreed to make some concessions on the use of cryptocurrencies as a payment tool in international trade.

And this is where Siluanov sees common legislative ground. He said that “it is necessary to work with the Central Bank on identifying possible options for using cryptocurrencies for settlement, both at home and abroad.”

Boom in Russia’s cryptocurrency mining industry – will the bank make concessions?

In addition, the minister said the bank “agreed to meet to discuss [crypto]mining.” He stated:

We need to determine what can and cannot be done with cryptocurrency. At the moment, we have agreed with the Central Bank to discuss mining. We need to consider whether this money can be used for both domestic and international transactions.
The Bank would be unlikely to make such drastic concessions. Elvira Nabiullina, the bank’s longtime governor, has repeatedly stated that she will not allow “cryptocurrencies to enter the Russian economy.”

Such talk could resurrect plans to create a state-run cryptocurrency exchange, which would essentially buy up the coins of Russian miners and sell them to companies that pay with cryptocurrencies for foreign goods.

Unexpected profit from Russian mining tax

Russian cryptocurrency miners say legalizing their sector could yield a $540.3 million tax windfall for the state.

Industry bosses say they are ready to invest $4 billion in new multifunctional data centers. It could also save $32.4 million in technology investments. Moscow has refused to legalize their business, leaving it in an almost legal gray zone, which has frustrated the miners.

Lawyers in Russia are shocked that cryptocurrency mining is neither legal nor illegal. Additionally, they have responded to the Energy Ministry’s controversial plans to raise electricity rates by up to five times.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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