The race to launch crypto regulations in Russia could still be halted by the country’s Central Bank, which, despite reports to the contrary, is still not happy about recently unveiled plans to “legalize” crypto and bring the industry under a regulatory umbrella. But the pro-business (and reservedly pro-crypto) Ministry of Finance has moved to reassure the bank that its concerns will be met with a piece of draft legislation set to be unveiled on Friday this week.
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After years of disagreement on the matter of crypto between the ministry and the Central Bank, lawmakers and other officials fast-tracked the process of creating a draft bill – after direct orders to settle their differences from President Vladimir Putin.
The Central Bank had seemingly agreed to climb down from its calls for an all-out ban on crypto in Russia, but late last week, Kommersant reported, its Governor began firing shots at the bill. The media outlet quoted Governor Elvira Nabiullina as stating that the ministry’s plans to regulate the crypto markets “do not eliminate existing risks,” and that the implementation of the bill could lead to the arrival of “new threats.”
Nabiullina, who favors fast-tracking the creation of a digital ruble and sidelining crypto, was quoted as explaining:
“We have sent our response on the [proposal] made by the Ministry of Finance to the government. And the main conclusion is that the proposal does not yet allow [for the elimination] of the risks that we have identified – but at the same time create a new threat.”
The ministry, for its part, has countered by hinting that Central Bank is essentially proposing a step backward.
The news agency Tass quoted Alexey Moiseev, the Deputy Finance Minister, as claiming that a ban on cryptoassets and mining – the Central Bank’s favored course of action – would “slow down the development of new technologies and services” in Russia.
“The [draft] proposal responds to all the risks that the Central Bank has spoken about. Clear regulation excludes the possibility of the emergence of a [crypto as a] parallel financial system in Russia. It also seeks to introduce clear and understandable rules for market participants, and creates tools to protect the rights of investors, including existing crypto holders.”
The Deputy Minister added that “the introduction of prohibition” of crypto would “automatically” make “millions of people” who currently own crypto in Russia into “criminals.”
The same news agency stated on February 11 that the Russian authorities are not considering the possibility of lending in cryptoassets or its use as collateral, citing an explanatory note from the Ministry of Finance. These are “not envisioned by the proposed approach,” the document states.
What is envisioned, however, is the introduction of restrictions and controls when it comes to advertising crypto.
Additionally, the Ministry seems to be considering limiting the list of coins available for trading in the country. As previously said, the agency argues that foreign crypto exchanges don’t verify projects prior to listings, thus leaving users vulnerable to scams, but that the non-residents in Russia should be allowed to purchase crypto through Russian exchanges and those foreign ones that will have a representative office in the country.
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