Cryptocurrency News

Against the Wish of its Central Bank, Russia’s Ministry of Finance Introduces Digital Currency Bill

As the mild internal conflict between Russia’s Ministry of Finance and its counterpart, the Central Bank, continues, the Finance Ministry has officially presented a bill to introduce and regulate digital assets rather than ban them. The introduced bill is apparently against the wish of the Central Bank, which vehemently opposes the adoption of cryptocurrencies in Russia.

The embattled bill-themed “On Digital Currency” was introduced to the Federal Government on Feb 21st. Explaining the bill’s content, the Ministry stated that it borders on creating legal space for digital trading currencies, coupled with its associated rules regulating the circulation of these digital assets and the prospective participants. The bill, which does not seek to present digital currencies as a legal tender in the country, sees it as a vehicle to drive investments in Russia.

Central Bank of Russia’s Position

The decision of the Ministry to regulate cryptocurrencies runs contrary to the bills prepared on Feb 18th by the Central Bank. The drafted bill seeks to ban all crypto activities in the Russian Federation. 

The Central bank imposed fines on individuals, organizations, companies, or institutions that violated the bills’ provision to ensure strict adherence.

Analyzing the position of the Central Bank of Russia (CBR), the apex bank is relatively not against individual or private ownership of crypto assets. They subtly target the big players in the economy. Private Banks, Institutional Investors, and key Financial players are discouraged from investing, trading, selling, or buying cryptocurrencies through the bill.

On Digital Currency

Though the bill, as proposed by the Federal Ministry of Finance, is far less than the expectations of Russian citizens, it is a breath of fresh air.

On Feb 8th, a document containing the mechanisms adopted for the regulation of digital currencies was approved by the Russian government. The paper introduced a regulatory framework to see digital assets as a regular currency rather than a legal tender. Consolidating its choice of instituting a regulatory framework against the CBR’s ban, the Ministry of Finance argued that Russia is a factor in the crypto market.

Analyzing the ban’s effect, the Ministry maintained that the country possesses more than 12 million crypto wallets and over USD26 billion of digital assets held in those wallets. Additionally, Russia has the global third-biggest crypto mining capacity. Premised on the above analysis, the Ministry of Finance dismissed the crypto ban proposal as practically not feasible and beneficial to the people and government of Russia.

However, to ensure safe financial practices, the Ministry encouraged the financial service providers to educate and inform their respective customers on the risks of trading cryptocurrencies. More so, to ensure fairness and reduce risk degrees, intending crypto traders will be assessed to ascertain their knowledge about crypto investments. 

As presented by the Ministry, the bill proposed an annual investment restriction of 600,000 Rubles ($7900) for those who passed the test. Yearly investment of up to 50,000 Rubles ($650) for those who failed the test, and no annual restrictions for businesses and certified investors.

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