Russia Rejects Crypto Ban, Opts for Regulatory Roadmap

Key Takeaways

  • A roadmap that outlines restrictions on digital assets rather than a ban has gained support from Russian authorities.
  • This roadmap opposes the ban proposed last week by the Bank of Russia, which serves as the country’s central bank.
  • The Bank of Russia still supports a ban on crypto.

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Agencies in Russia are in favor of a cryptocurrency regulation roadmap rather than a blanket ban as was feared last week.

Regulation Favored Over Prohibition

Authorities in Russia have put forward a plan to restrict and regulate the trading and mining of cryptocurrencies without imposing an outright ban on the industry, according to Reuters.

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The roadmap sets out various deadlines. By May, Russia should design a compliance platform for P2P platforms. By November, it should be using anti-money laundering guidelines recommended by the Financial Action Task Force. By the end of 2022, it should have registration rules for crypto exchanges in place.

The document also suggests punishments for failing to disclose crypto transactions on the part of businesses. It could even go as far as to mandate that Russian citizens report their crypto holdings.

The roadmap has reportedly been fully embraced by the agencies involved in its design (except for the Bank of Russia) and has been signed by Deputy Prime Minister Dmitry Chernyshenko.

President Vladimir Putin is likely to support the roadmap. Last week, he opposed a ban by stating that the central bank “should not stand in our way of technological progress.” He also suggested that Russia could maintain a competitive advantage in mining due to its power surplus, assuming the practice is regulated and taxed.

Central Bank Still Advocates for a Ban

This roadmap would be more favorable to the crypto industry than the overarching ban that the Bank of Russia proposed last week.

At that time, Russia’s central bank called for a ban on cryptocurrency transactions, citing concerns over financial stability. It also called for a ban on crypto mining due to the environmental impact of the energy-intensive process. The bank additionally pushed for financial institutions to be forbidden from investing in crypto-assets. 

The Bank of Russia expressed familiarity with the roadmap revealed today. However, it urged for stronger restrictions, stating that “it is necessary to prepare a federal law, establishing a ban … [and] also to determine liability for violating this ban.”

The bank’s head of financial stability, Elizaveta Danilova, added that the bank does not aim to ban ownership of cryptocurrencies.

The Bank of Russia cannot implement the recommendations that it has proposed on its own, meaning that it must continue to negotiate with other Russian agencies in the coming months.

Related:  SkyBridge Capital Founder on Crypto Market: “We Haven’t Sold One Position”

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies. 

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