According to a statement released on Tuesday, the Russian government and the country’s central bank have reached an agreement to draft legislation or change existing rules that recognize crypto as a form of currency.
The agreement is a significant reversal after the Bank of Russia last month proposed banning miners and several other crypto operations over concerns that they could endanger the country’s financial system.
Russian officials might accept crypto as a form of currency
Considering the Bank of Russia’s previous proposal to ban miners and several other crypto businesses over fears that they might jeopardize the country’s financial system, this agreement is an interesting move for sure.
Cryptocurrencies will be treated as regular currencies like the ruble and not as financial digital assets, according to a report by Russian business news outlet Kommersant. The legislation will be completed by February 18th.
The government’s plan, according to the draft text, will attempt to integrate a mechanism for the circulation of digital currencies into the country’s financial system while maintaining control over cash flows at credit institutions.
“The establishment of rules for the circulation of cryptocurrencies and control measures will minimize the threat to the stability of the financial system and reduce the use of cryptocurrencies for illegal purposes since a complete ban on the segment of operations related to their circulation is impossible.”
According to the agreement, ‘digital currencies’ will be used as legal money only after thorough identification processes have been completed by the country’s banking system or authorized intermediaries, and operations with a value of R 600,000 ($8,016) or more must be reported.
Transacting outside of these authorized parameters is considered a crime, and fines will be levied for illegal crypto acceptance as a payment method.
“The complete absence of regulation of this industry, as well as the establishment of a ban, will lead to an increase in the share of the shadow economy, an increase in fraud cases and destabilization of the industry as a whole.”
Other measures include establishing an “obligation” for market participants to educate Russian citizens about the dangers of digital assets.
Last month, Ivan Chebeskov, a senior official within the Ministry of Finance, has declared his support for crypto regulation rather than outright prohibition. He said:
“We need to give these technologies the opportunity to develop. In this regard, the Ministry of Finance is actively involved in the development of legislative initiatives in terms of regulating this market.”