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Despite polar views on crypto regulation with the Central Bank, the Ministry of Finance in Russia has submitted an official draft bill.
The Ministry of Finance in Russia on Monday, February 21st, stated that it had officially submitted a draft bill on crypto regulation to the Russian government. The ministry also said it had received a proposal from the Central Bank of Russia and would factor the apex bank’s opinions in deciding crypto regulation. However, it added that this would depend on whether or not the proposal contradicts the finance ministry’s approach.
The ministry made changes “aimed at creating a legal market for digital currencies with the establishment of rules for their circulation and their participants”. It also added that parliament’s adoption of the new bill would sway the judiciary in considering crypto as strictly an investment tool. This position seems to oppose the use of cryptocurrencies as a means of payment.
The latest move taken by the Russian finance ministry could potentially put an end to the skirmish between several authorities in the country. Perhaps the most notable of this is between the country’s central bank and the finance ministry itself which seemed to differ on opinions. While the Russian Ministry of Finance advocates for proper regulation of crypto activities, including trading and mining, the Bank of Russia wants an outright blanket ban.
The Russian central bank’s position is due to the threat that digital currencies pose to financial stability. In addition, the premier bank views crypto as a potential impediment to its own forthcoming digital ruble. The political faceoff has even led to the country’s president Vladimir Putin enjoining authorities to find a consensus.
Major Talking Points from the Draft Legislation on Crypto Regulation in Russia
The draft legislation of the Russian finance ministry seeks to merely provide a legal market for digital currencies. One of the proposals contained therein is for customer identification in transactions involving the sale or purchase of crypto. However, this move also negates the anonymity typically associated with such and is thus considered a major selling point.
Another proposal includes foreign crypto exchanges having to obtain licenses to operate in Russia. Meanwhile, domestic exchanges are to abide by a slew of corporate governance rules and regulations. These include reporting, information storage, internal control and audit, risk management system, and fund management protocols. In addition, the Russian finance ministry also wants to introduce financial literacy tests. The purpose of this test is to determine the amount individuals may be able to invest.
Citizens who score high on this online quiz will be eligible to invest crypto worth 600,000 rubles, or $7,853 each year. However, those with low scores will not be able to invest more than 50,000 rubles, or $650 per annum. Lastly, the Russian Ministry of Finance added that “qualified investors and legal entities will be allowed to make [digital currencies] transactions without any restrictions.”