Russian Finance Ministry submits crypto regulatory framework for review

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In a new turn of the Russian crypto regulatory saga, the country’s Ministry of Finance has presented an initiative that contrasts with the strong position of the central bank.

Russia’s Central Bank has recently called for a ban on cryptocurrency trading and mining activities across the country. Citing volatility, environmental impact and use in illegal activities, the central bank published a report calling on regulators to implement a total ban and impose strict sanctions on violators.

However, the proposal was opposed by the Russian Ministry of Finance. A few days after the central bank’s call for a ban, Ivan Chebeskov, a ministry official, stated that the government should regulate crypto instead of banning it altogether. Chebeskov said the authorities should give the industry a chance to develop and that a complete ban could result in Russia delaying the technology.

Thursday, RBC reported that the ministry sent a letter to Dmitry Chernyshenko, deputy chairman of the government of the Russian Federation, and officially submitted a regulatory proposal to the government. The proposal introduces a new framework for crypto use in the country, which suggests that crypto operations should be conducted within the traditional banking infrastructure, with mechanisms to identify personal data of merchants.

According to the ministry, regulating cryptocurrency can bring multiple benefits, such as increasing tax revenue and strengthening the ability of police to track criminal activity.

The ministry cites statistics showing that Russian citizens hold a cryptocurrency worth about 2 trillion Russian rubles, adding that a total ban or lack of regulation will eventually undermine the industry and create a black market.

Related: Bitcoin rejects Russian crypto ban fears as BTC price approaches $ 43.5K

Telegram founder Pavel Durov also reacted negatively to the proposed ban on crypto. The technical executive has expressed that a ban may not stop “unscrupulous players” but will affect executive and legal blockchain projects. He added that a ban would delay the development of blockchain-based technologies.

Meanwhile, Russian President Vladimir Putin highlighted some benefits to crypto in a meeting with government officials. “We also have some competitive advantages here, especially in the so-called mining,” Putin said. The president then called on the government and the central bank to reach an agreement on the matter.