Russia to recognize Bitcoin as currency Russia to recognize Bitcoin as currency

Russia to recognize Bitcoin as currency

Authorities in Russia have reached a compromise on regulations concerning Bitcoin and other digital currencies.

Russia to recognize Bitcoin as currency

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

According to a local news report, the controversy around the status of cryptocurrency in Russia is about to come to an end. 

The Russian newspaper Kommersant reported that the Bank of Russia and the government have now reached an agreement on crypto regulations. 

Russia to recognize crypto as currency

Following this agreement, authorities in Russia are drafting a law that’ll define crypto as an “analogue of currencies” instead of digital financial assets.

Going further, the report stated that with such classification, the use of crypto would be limited to the legal sector. This means that crypto would be integrated into the financial system, and users will only have access through the banking system and licensed intermediaries.

Earlier this year, the Bank called for a blanket ban on Cryptocurrencies, citing several reasons why such is necessary. Reasons included its use for crime and its speculative nature.

But many members within the government kicked against such a move, claiming it’ll set Russia back in the quest to stay conversant with the technology. 

The Ministry of Finance even went as far as to submit a regulatory framework on cryptocurrency.  Several other government stakeholders, including the parliament, also supported regulation instead of outright banning.

Russia welcomes crypto regulatory clarity

With this report, it appears that the Central Bank has finally compromised on its stance against crypto. In its proposed regulatory framework, the Ministry of Finance has also advised an integration of crypto into the banking system. The draft of the new crypto law incorporates this as well.

Regulatory clarity on crypto has become necessary in the country amidst the large investments of residents. Russians hold up to 2 trillion rubles in crypto-assets, and there’s a general and growing awareness around crypto in the country. 

A recent poll by the Russian Public Opinion Research Center (Vtsiom), revealed that 64% of Russians have heard about Bitcoin, and only 19% know nothing about cryptocurrency.

The move to regulate crypto also seems to have the blessing from Russian President Vladimir Putin. He had recently called on the Bank and government authorities to compromise. 

As part of the proposed laws, any transaction exceeding 600,000 rubles (around $8000) must be declared. Non-declaration would constitute a criminal offense. The law also intends to criminalize those who illegally accept crypto as means of payment.