Russian government has been giving mixed signals on cryptocurrency regulation in the country. Despite months of discussion around a possible cryptocurrency regulation bill and initial positive signs, it now appears that the Russian government may not be actually pro-crypto after all.
During a recent interview with a Russian news outlet Interfax, senior Russian Central Bank Executive Alexey Guznov has stated that a bill on “Digital Financial Assets” will ban circulation and minting of cryptocurrencies in the country. Guznov heads the legal department of the Central Bank and his views have poured cold water onto earlier claims that Russia will have pro-crypto regulation that will allow cryptocurrencies to grow and prosper further.
Russia is one of the biggest adopters of the technology right now. When it comes to mining and using Bitcoin as an actual currency, Russia has been one of the most forward thinking countries in Europe and the world. It has allowed weathered old Soviet factories to be transitioned into one of the biggest Bitcoin mining farms in the world. The cold weather makes the mining operations useful and energy efficient and crypto usage is one of the highest in the region.
Russian Central Bank’s Dislike of Crypto
Previously, various Russian parliament members and committee members drafting the cryptocurrency legislation had come out and said that cryptocurrencies will be given a favourable space within the Russian ecosystem but now it seems like the Central Bank is flexing its muscles and doesn’t want to endorse a disruptive technology like Bitcoin.
The main aspect of the proposed bill according to Guznov is that circulation and minting of cryptocurrencies will not be allowed. But, cryptocurrencies already in circulation including Bitcoin and other altcoins will be allowed for trading purposes but with increased regulatory measures.
Guznov said:
“In terms of the functioning of the financial system and consumer protection system, legalization of the issuance and facilitating the circulation of cryptocurrencies is an unjustified risk. As such, the bill explicitly prohibits emission and organization of cryptocurrency circulation, introducing legal liability for violating these rules.”
The Silver Lining
Although Guznov’s comments seem pretty damning, it is easy to see that this may not be the final form of the proposed legislation in the Russian parliament. Debate is continuing in the upper echelons of Russian power and perhaps prohibitionists may not have their final say. Guznov himself gave little clarity about the future bill and only focused on the “banning” parts of the legislation.
Putin’s Concern
President Vladimir Putin is a known admirer of the cryptocurrency world because he believes that it will eventually be able to break the dominance of the US Dollar at the world stage. He has ordered the adoption of a suitable legislation twice but he has so far any consensus has not been achieved.