Russian finance minister hints at lighter cryptocurrency regulation

Western sanctions could push Russian politicians to embrace cryptocurrencies

Fears that Russia could introduce a China-style crackdown on cryptocurrencies has waned further in recent days, after the nation’s finance minister Anton Siluanov suggested in a letter to Prime Minister Mikhail Mishustin that the burgeoning sector should be regulated rather than banned.

Siluanov & regulation

According to the Russian newspaper Kommersant, Siluanov suggested that some Russian banks should be granted licences allowing them to facilitate cryptocurrency trading. Potentially turning them into quasi-cryptocurrency exchanges. 

He suggested that, in order to satisfy the concerns of the most anti-cryptocurrency state institutions, including Russia’s central bank, cryptocurrencies could be classed as investment assets.

In this situation, cryptocurrencies would be regulated in the same way that transactions with exchange instruments and cash transactions are currently. 

This would take cryptocurrencies out of their current ‘grey’ zone and divide them into a ‘white’ market with regulation and a ‘black’ market, activity in which will be punished by state authorities. 

This notion of a grey zone was also employed by the Sergey Katyrin, the head of the Russian Chamber of Commerce and Industry, in a recent letter to the Ministry of Finance. According to the news agency TASS, Katryin stated: 

“It seems necessary to make significant revisions to current legislation and also to hammer out a range of new regulatory acts that will determine in particular the legal status of the mining as a kind of business activity, making it possible to exclude this activity from the ‘grey zone,’ ensuring relevant tax and other compulsory payments. In addition, this will make it possible to defuse tension on matters of illegal electricity use.”

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Although official attitudes towards cryptocurrencies have been split in Russia from their inception, ongoing tension with Western powers over Ukraine could ultimately lead to Russian leaders embracing them as a way to bypass sanctions. 

In late January, a number of Western powers threatened to remove Russia from the SWIFT international payments system after it built up troops on the Ukrainian border. 

Last week, Democratic Senator Bob Menendez reportedly embraced proposals to impose sanctions on Russia immediately. The chair of the powerful Senate Foreign Relations Committee had days earlier threatened “the mother of all sanctions” against Russia and its president Vladimir Putin. 

In a video conference with members of the Russian government last week, the Russian leader outlined his attitude to cryptocurrency mining, stating: 

“Of course, we also have certain competitive advantages here, especially in the so-called mining. I mean the surplus of electricity and the well-trained personnel available in the country.”

According to Kommersant, draft scenarios for regulating cryptocurrency markets and assessing their consequences are expected to be prepared by 11 February.

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