The Russian government together with the country’s central bank has decided to allow the circulation of cryptocurrencies, as it began working on a draft law that is slated to be ready by February 18, 2022. The announcement comes after a few days when the authorities expressed their intention to bring cryptocurrency under a regulatory framework.
Leading Russian newspaper Kommersant who first broke the news stated that cryptocurrencies would be defined as “an analog of currencies, and not digital financial assets [DFA]” and their circulation will be possible only with full identification, through the banking system or licensed intermediaries.
The post went on to mention that all transactions worth more than 600 thousand rubles must be declared, or else it would become a criminal offense and fines would be imposed for illegally accepting crypto as payment.
The proposal also suggested allowing banks to act as intermediaries between users and cryptocurrency exchanges. For that, the institutions will need to verify users’ identities, monitor transactions for signs of illegal activity, provide rails for fiat transfers and safe information about transactions for at least five years.
Banks are also required to provide users with the documents necessary to report their taxes and government agencies’ data about transactions on the request.
Further, banks working with trading platforms must use the Transparent Blockchain transaction tracking tool developed by its native Rosfinmonitoring and not products from overseas firms like Chainalysis, Elliptic, or Crystal Blockchain.
What led to Russia agreeing to regulate cryptocurrency?
Last week, Russian media group RBC reported that the authorities have drafted a regulatory roadmap, signed by Deputy Prime Minister Dmitry Chernyshenko. As per Kommersant, Finance Minister Anton Siluanov wrote a letter to Prime Minister Mikhail Mishusti explaining the concept of the regulation of the crypto market.
The issue was discussed and has reached a consensus with all stakeholders such as regulatory bodies, including the ministries of economy and digital development, Russia’s financial watchdog, Rosfinmonitoring, the Federal Tax Service, and the Federal Security Service.
According to PM Siluanov, Russian citizens have 12 million crypto wallets with coins worth around 2 trillion rubles [almost $26.5 billion]. However, sources close to the matter have revealed that recent estimates that showed Russians owning $215 billion in cryptocurrency might have served as an impetus for the government‘s decision to regulate cryptocurrency.
