Russian Finance Minister Says the Draft Law to Legalize Cryptocurrencies Will be Ready by the End of 2017

| Updated
by Polina Chernykh · 3 min read
Russian Finance Minister Says the Draft Law to Legalize Cryptocurrencies Will be Ready by the End of 2017
Photo: International Monetary Fund / Flickr

Russian finance ministry and the central bank are reportedly planning to legalize the use of the digital currency in Russia by the end of the year.

The government of Russia will likely make bitcoin and other virtual currencies legal in the country. According to Russia’s Finance Minister, Anton Siluanov, the regulators are preparing the draft bill on legalization of cryptocurrencies in the Russian Federation.

Earlier this year, the country’s Deputy Finance Minister, Alexey Moiseev, announced the authorities are going to recognize the legitimacy of cryptocurrencies in order to prevent illegal money transactions. The central bank claimed that the lack of regulation makes crytocurrency a perfect tool for criminal operations like money laundering.

The new legislation, which is expected to be finalized by the end of 2017, will define the rules for purchasing cryptocurrency and registering those who are willing to acquire virtual money.

“The state understands indeed that crypto-currencies are real. There is no sense in banning them, there is a need to regulate them,” Siluanov said during a financial forum in Moscow.

The Finance Minister proposed to organize the process of buying digital currency in similar way as acquiring federal loan bonds. Also, Siluanov noted that investors are now facing high risks when purchasing digital currency due to the lack of security and high volatility. Just a few days ago, the Russian central bank issued an official statement saying it is too risky to invest in digital currency and acquire it via Initial Coin Offerings (ICOs).

“We believe it is possible for individuals to participate in the purchase of these instruments, but these purchases should be clearly regulated, identified, and settlements in these cryptocurrencies must be controlled by the relevant authorities,” Siluanov said.

In the meantime, the authorities in China, where cryptocurrency has been under increased control over the last months, have recently banned all ICO-related activities in the country in a move to protect investors. According to the regulators, ICOs involve such crimes as financial fraud, pyramid scheme, as well as illegal distribution and issuance of tokens.

Russia’s view on digital currency seems to be changing as only a year ago the authorities threatened bitcoin users with up to seven years in jail for selling, mining and issuing the digital currency and are now looking to legalize it.

Besides, the country is open to the adoption and development of blockchain. The President of Russia, Vladimir Putin, showed his interest in the technology during a meeting with Ethereum co-founder Vitalik Buterin this summer.  The conversation took place during International Economic Forum, where Buterin discussed the possible applications of blockchain technology and its potential to create the new digital economy.

In July, the Russian airline PJSC Siberia Airlines partnered with Alfa-Bank to use the Ethereum blockchain for issuing flight tickets.

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