Russia Advances On Efforts To Regulate Bitcoin, Crypto

The Ministry of Finance suggested letting banks sell bitcoin while the Chamber of Commerce thinks mining should become an established business.

Efforts to welcome bitcoin in Russia with clear regulation keep growing with the Ministry of Finance and the Chamber of Commerce and Industry being the latest two entities voicing their suggestions despite the central bank’s continued hard line.

Russian Minister of Finance Anton Siluanov sent a letter to Prime Minister Mikhail Mishustin on Wednesday reiterating the ministry’s inclination to regulate, instead of ban, cryptocurrency trading and mining in the country, per a report by Russian newspaper Kommersant.

The minister proposed to grant some Russian banks a license that would confer upon them the right to facilitate bitcoin trading, supposedly enabling them to function as bitcoin exchanges.

The new regulation would grant cryptocurrencies the status of investment assets, meaning they would be regulated in the same way as cash transactions and transactions with exchange instruments, creating a “white” market, according to the report. Identification of market participants would be mandatory with extensive know-your-customer (KYC) and anti-money laundering (AML) procedures would be enforced across the regulated cryptocurrency market, removing Bitcoin from the current “gray zone.” Administrative and criminal liabilities would apply to transactions made in the “black” market outside licensed gateways.

The Ministry of Finance, in turn, received a letter by the head of the Russian Chamber of Commerce and Industry, Sergey Katyrin, which urged the governmental agency to also move bitcoin mining out of the current “gray zone,” according to a report by Russian news agency TASS.

“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 ‘gray zone,’ ensuring relevant tax and other compulsory payments,” the letter said. “In addition, this will make it possible to defuse tension on matters of illegal electricity use.”

President Vladimir Putin backs the Ministry of Finance’s efforts to regulate bitcoin mining and trading despite the central bank’s continued warnings that the industries could pose certain risks to the Russian population.

Putin highlighted last week that the country’s energy surplus and well-trained workforce could bring “advantages” to mining bitcoin, asking the Bank of Russia and the ministry to “come to a consensus.”

The Russian government has since been making quick progress to expedite regulation in an effort to welcome bitcoin and cryptocurrency businesses and investors by establishing a roadmap for legislation.