Russian Government Legitimizes Cryptocurrency, Labels It “Analog of Currencies”

After a prolonged back and forth on how to handle cryptocurrency, the Russian government and the Central Bank of the Russian Federation have settled to draft a bill recognizing these assets as an “analog of currencies.” That said, the authorities should present a draft on or before February 18.

Before now, Russia had remained conflicted on how to approach digital assets for years. Only recently, some governing bodies of the largest nation by landmass got into heated debates on how to tackle crypto.

On one end, the Central Bank of Russia proposed an outright ban of anything and everything crypto, citing the excessive volatility of the asset class as a threat to the nation’s financial system. On the other, Russia’s finance ministry proposed a softer approach through the implementation of regulations instead of an outright ban.

According to local newspaper company Kommersant, Russian authorities decided to go with the finance ministry’s suggestion and will prepare a draft law by February 18 to define cryptocurrency as “an analog of currencies” instead of digital financial assets.

The official government statement read that the purpose of the regulatory approach was to integrate digital currencies into its financial system and “ensure control over cash flows in the circuit of credit institutions.”

Russian Authorities to Closely Monitor Cryptocurrency Transactions

That said, crypto transactions will only be possible through authorized outlets, including crypto exchanges, P2P platforms, and banks, to closely monitor activities.

Snippets of the proposed draft law suggest that crypto transactions of over 600K rubbles ($8K) must get declared as failure to do so is a criminal offense.

Interestingly, Russian President Vladimir Putin appeared to be in favor of regulation instead of an outright ban and also supported crypto mining.

Reports show that Russians are among the most active demographic in the crypto space, with estimates revealing that they own over $200 billion worth of digital assets.