Crypto Regulations Coming to Russia, Finance Ministry Confirms

Russian Hackers Used Flash Vulnerability Against Foreign Governments

Russia’s Finance Ministry is preparing to unveil a new regulatory framework governing cryptocurrencies, putting investors on high alert on everything from taxation to mining laws.

Ministry of Finance Drafting Legislation

Russian Finance Minister Anton Siluanov has confirmed via state-owned television that his department is drafting into law a new set of regulations governing the whole of the crypto economy. This includes taxation, mining rules and new guidelines for exchanges that facilitate the buying and selling of digital assets.

“The Ministry of Finance has prepared a draft law, currently under consideration, which will determine the procedure for issuing, taxing, buying and circulation of cryptocurrency,” Siluanov said, as quoted by Russian news agency TASS.

Regulators are also seeking to amend legislation pertaining to fin-tech and digital payments more generally.

Policy U-Turn

Russia’s path toward cryptocurrency regulation took an interesting turn about three months ago when the Kremlin issued a blanket ban on bitcoin exchanges. At the time, the head of Russia’s central bank called cryptocurrencies “dubious instruments” that are part and parcel of the criminal underground. 

The government made a U-turn just a few days later to say it would now regulate the crypto market. The decision followed high level talks between President Vladimir Putin, government officials and business leaders. Shortly thereafter, Russian authorities floated the concept of a state-issued ‘CryptoRuble’.

As the name implies, the CryptoRuble would become Russia’s digital currency backed by fiat money.  This would essentially centralizing the mining process, but allow participants to exchange cryptos for fiat anytime they desired. A similar concept is already under way in Kazakhstan via the Astana International Finance Centre, a developmental body that seeks to streamline the regulation and adoption of digital assets.

Russia’s outlook on cryptos has matured significantly over the past two years. As recently as March 2016, the Finance Ministry had proposed a seven-year prison sentence for both users and adopters of bitcoin.

According to Siluanov, there’s no longer an appetite to ban cryptos all together.

“There is no sense in banning them,” Siluanov said of cryptocurrencies in September, adding that “there is a need to regulate them.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi