Russia Preparing to Recognize Crypto as Form of Currency

The Russian government and central bank could soon recognize digital assets as a form of currency, and are now preparing a law to regulate them, the Russian government published on their website on 8 February.

According to the announcement, Russian authorities are currently working on a draft law, expected by 18 February, that would define cryptocurrencies as an “analogue of currencies” rather than as digital financial assets. Once the regulatory framework has been completed it will only be possible to use crypto in the legal sector after complete identification through the banking system, or licensed intermediaries.

Russian newspaper Kommersant noted that possession of crypto and crypto transactions in Russia are not prohibited, but must be done through a “organizer of the digital currency exchange system” (a bank with universal license), or through a peer-to-peer (p2p) exchange licensed in the country. The publication also highlighted that transactions of more than 600,000 rubles (around $8,000) have to be declared, otherwise they will be considered a criminal act.

The news came only a couple of weeks after the Bank of Russia issued a report on cryptocurrencies, which advocated for a complete crypto ban, arguing that the speculative nature of crypto poses a significant threat to the country’s financial stability. The central bank also advised that financial firms should be prohibited from facilitating crypto transactions.

Shortly after the report was issued, the Russian Ministry of Finance came in opposition to the central bank, saying that the government should regulate the asset class rather than ban it. The comment was made by Ivan Chebeskov, a director within the Ministry of Finance, who also noted that the prohibition of crypto will likely result in Russia falling behind other countries. The Russian President, Vladimir Putin, has also expressed his support for regulating the crypto mining sector in the country, rather than prohibit it.