The Russian Ministry of Finance is seeking to settle long-standing differences with the Central Bank regarding crypto regulation. Finance Minister Anton Siluanov expressed optimism that both entities would come to an agreement on how to regulate cryptocurrencies in the country. The Ministry of Finance has been pushing for regulation and taxation of crypto exchanges and traders, while the Central Bank has previously favored a ban on all crypto-related activities. Despite previous unsuccessful attempts to pass legislation on the matter, both parties are now moving towards finding a solution.
Amidst the ongoing impasse, more people in Russia are using cryptocurrencies for payments according to a leading Moscow-based academic. The Ministry of Finance and the Central Bank have been unable to reach a consensus on how to regulate the crypto market, resulting in a lack of clarity and accountability. Attempts to pass legislation in early 2022 were met with opposing bills from both sides, leading to a stalemate in the State Duma. The lack of regulation has also impacted the nation’s FATF compliance rating, prompting calls for swift action.
The Russian Central Bank has recently shown a willingness to soften its stance on certain aspects of crypto, particularly industrial mining. The bank has agreed to make concessions on the use of crypto for international trade settlements, signaling a potential shift in its approach to cryptocurrencies. Finance Minister Siluanov sees an opportunity to collaborate with the bank on identifying ways to use cryptocurrencies for domestic and international settlements. Discussions on mining and the potential use of mined tokens for payments are also underway between the Ministry of Finance and the Central Bank.
Despite some progress, the Central Bank remains hesitant to fully embrace cryptocurrencies in the Russian economy. Governor Elvira Nabiullina has reiterated her opposition to crypto’s integration into the economy, signaling that the bank may not make sweeping concessions on the matter. While there is an interest in exploring the use of mined tokens for external payments, plans to create a state-owned crypto exchange to facilitate these transactions may face resistance. The uncertainty surrounding the legal status of crypto mining in Russia has led to frustration among industry players.
Russian crypto miners have estimated that legalizing their industry could generate significant tax revenue for the state. Industry leaders have expressed readiness to invest in new data centers and infrastructure, which could also benefit the country economically. However, the lack of clear regulations and ongoing disputes between government entities have hindered the progress of the crypto mining industry in Russia. Miners have also raised concerns about potential electricity tariff hikes, further complicating the business environment for crypto operators in the country. The need for comprehensive crypto regulation in Russia remains a pressing issue that both the Ministry of Finance and the Central Bank are working to address.
