The Russian Ministry of Finance refuses to give Bitcoin legal tender status as the country moves forward with crypto regulatory plans Kommersant noted that Bitcoin (BTC) transactions and ownership of the cryptocurrency are not prohibited in the Russian Federation; However, they must be done through a “digital currency exchange organizer” (a bank) or a peer-to-peer exchange licensed in the country. Cryptocurrency transactions over 600,000 rubles (about US$8,000) must be reported; Otherwise, it could be considered a criminal act. According to TASS, the two government agencies have agreed that it is “impossible” to proceed without enabling cryptocurrency as a legal payment method for international trade. This year, Russia was investigated for allegedly using cryptocurrency to circumvent sanctions imposed after the country attacked Ukraine. The Russian government and central bank are currently working on a bill that will define crypto as an “analogue of currencies” rather than digital financial assets that will be launched on February 18. Cryptocurrencies would only work in the legal industry if they had full identification by the banking system or licensed intermediaries. “I believe this has value,” Putin said at the time, referring to Bitcoin. “But I don`t think it can be used in the oil trade.” May 18 (Reuters) – Russia will sooner or later legalize cryptocurrencies as a means of payment, Industry and Trade Minister Denis Manturov said on Wednesday, hinting that the government and central bank could move closer to settling their differences. Russian lawmakers have opposed the idea of using cryptocurrencies as a payment method in the past. In 2020, Russia passed an important cryptography law, “On Digital Financial Assets,” which officially banned the use of cryptocurrencies such as Bitcoin (BTC) for payment purposes. The Bank of Russia was skeptical about the idea of cryptocurrency payments because it wanted to protect the Russian ruble as the only legal tender in the country. Citing financial stability risks related to the growing number of crypto transactions, other central bank officials said last year that they see no place for the use of cryptocurrency in the Russian financial market. According to Moiseev, the central bank has reconsidered its approach to regulating the industry “as the situation has changed.” He added that the planned infrastructure is “too rigid” for the use of cryptocurrencies in cross-border settlements.
“Which we certainly need to legalize in some way,” he concluded. The announcement mentions the ongoing controversy around cryptocurrencies in the country. The Bank of Russia – the country`s central bank – has proposed that all operations of mining, issuing and circulating cryptocurrency in the country be banned, the Finance Ministry said. “When it comes to our `friendly` countries like China or Turkey, which don`t put us under pressure, we`ve been offering them for some time to switch payments to national currencies such as the ruble and the yuan,” Zavalny said at the time. “With turkey, it can be reading it and rubles. So there can be a variety of currencies, and this is a common practice. If they want Bitcoin, we will trade Bitcoin. Manturov was asked on a forum if he believed that cryptocurrencies would become legal as a means of payment. The mandate is the result of lengthy discussions between the Central Bank of Russia and the government on cryptocurrencies.
In addition, the lawsuit maintains the ruble as the only legal tender in the Russian Federation. According to TASS, the regulatory framework needed to enable cross-border cryptocurrency settlements in Russia will continue to be deployed. What the future holds for cryptocurrency in Russia is unclear, but for now, the new law will come into effect on July 25. Russia`s central bank has reconsidered the approach to regulating crypto and has agreed with the Finance Ministry to legalize crypto for cross-border payments, local news agency TASS reported on Monday. Amid internal disputes over the status of cryptocurrency in the country, Russian President Vladimir Putin on Friday signed a new law that “prohibits the use of digital assets such as cryptocurrency and NFTs to pay for goods and services.” Crypto in Russia is already a controversial issue as many factions within the government are debating whether crypto should be regulated or banned. Protocol reported in January on the government`s disagreements over what to do with cryptocurrency. The Central Bank of Russia has called for a ban on cryptography, but the Finance Ministry has rejected this position, saying instead that the current regulation is sufficient and necessary to allow the development of crypto technology. “The implementation of the concept will ensure the creation of the necessary regulatory framework, bring the digital currency industry out of the shadows and create the possibility of legal business activities,” the statement said.
The Kommersant news agency noted that the use of crypto as a currency must follow identity checks carried out by a “digital currency exchange organizer,” that is, a bank or licensed intermediaries. Cryptocurrencies should not be given legal tender status and should only be treated as an investment vehicle, the Russian Finance Ministry said on Monday. The Russian Ministry of Finance presented the government in February with a draft law on cryptocurrency that, like current regulations, allows investments in digital assets such as Bitcoin and Ethereum, but not their use to buy goods. The situation has apparently changed amid Western economic sanctions following Russia`s invasion of Ukraine. In May, the Minister of Industry and Trade said that Russia would legalize crypto payments “sooner or later.” The governor of the Bank of Russia, Elvira Nabiullina, also later suggested that crypto can be used for cross-border payments, but only if crypto does not enter Russia`s national financial system. The recommendation is part of a draft law on cryptocurrency that the ministry submitted to the Russian parliament on February 18. The Finance Ministry`s proposal reinforces Russia`s current policy of not allowing cryptocurrencies as a means of payment. The move comes as Russia tries to best regulate the Bitcoin and cryptocurrency markets.
The world`s largest country, flooded by Western sanctions, has sought alternatives to the US dollar to ensure efficient trade in its commodities. What this law means for crypto holders in Russia is simple: you can still buy cryptocurrency, but no provider in the country will take your Bitcoin in exchange for, for example, groceries. Previous speculation suggests that the country is taking action against companies that potentially use cryptocurrency to circumvent sanctions imposed on Russia after its invasion of Ukraine. According to a February 23 New York Times article, shortly after the invasion began, crypto was likely used “to bypass the checkpoints that governments rely on — primarily money transfers through banks — to block the execution of transactions” when the sanctions began to take effect. Some have suggested that Russia will accelerate the development of a digital currency to mitigate the impact of sanctions. The Bank of Russia later clarified that it was still opposed to the legalization of crypto payments in the country, even though it had given the green light to cross-border payments.