Russian Finance Ministry Proposes Ban on Cryptocurrency Know Here Why?

Russian Finance Ministry Proposes Ban on Cryptocurrency Know Here Why?

The Finance Ministry of the Russian Federation has just proposed a ban over the circulation of crypto currencies in the country, stated Crypto News in its recent report on the 7th of July. According to Russian News Agency Interfax, the ban might actually be clubbed together with the severely postponed crypto mining legalisation bill, and the drafting of the policy has apparently already been completed.

The ministry wishes to pass the much awaited legislation which will finally officially make it permissible for all industrial crypto miners to work within the country. Russia already has a highly advanced crypto mining sector in recent years, especially because of the country’s unlimited access to rich energy resources, as well as a cold winter climate. However, mining is not recognized as an official business occupation as yet in Russia, and therefore, it also cannot be taxed like other legally recognized modes of business. Thus, the Russian finance ministry hopes to pass the mining bill issued by the State Duma, as soon as possible. 

This process, however, has been hindered by the Central Bank’s crypto-skepticity, as the bank is consciously working towards having all private crypto assets like Bitcoin (BTC), etc. declared illegal and being banned in the country. However, the Central Bank apparently has also recently agreed  to compromise on a few aspects of its decision regarding crypto currency use and circulation. The Bank authorities did this by having agreed to allow crypto miners to function in the country. The Central Bank has also, although unwillingly, allowed trading companies who utilise crypto for their business, permission to evade sanctions.

Russian policy-makers have approved only one crypto-related legislation so far. A law related to crypto that was passed last year, banned  the use of crypto for carrying out digital payments. It also prohibits companies from advertising any services related to crypto currency. Later last year, the law even saw a further amendment, which banned digital payments from being conducted, all over the nation. All other bills and policy proposals have not been successful in satisfying either the pro-crypto ministry, or the doubtful Central Bank the same. 

However, the ministry has reportedly recently suggested that the organisation of crypto circulation be banned, with the only exception of mining. The proposals will result in the complete banning of crypto exchanges and ATMs all across Russia. However, as expected, the proposals of the ministry are already being rejected and challenged, especially in the region of Moscow. Reportedly, law enforcement agencies believe that banning the organisation of digital currency circulation is a decision that requires further discussion.

The Federal Security Services also said that what is meant by “the organisation of the circulation of crypto assets”, requires to be defined more clearly. Additionally, the nation’s Investigative Committee, the central federal investigating authority, also commented that the above mentioned drafting of the policy suggested by the Russian Finance Ministry may actually lead to unclarity. 

Since more than 12% of Russians own crypto assets today, the police as well as a few other officials are also worried about how such a ban may be actually implemented in the country. In fact, a recent report by The Central Bank of Russia itself stated that an average Russian household owns as much as about $220 worth of crypto holdings, as compared to just $40 worth of gold, and even savings of just under $190.

Despite this, The Central Bank of Russia had previously ordered that miners’ tokens, or digital money coins, must only be sold in Foreign exchanges.. However, law enforcing institutions declined this, issuing a warning that doing this may actually result in a potential increase in money laundering across Russia.

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About Maria Morgan

Maria Morgan is a full-time cryptocurrency journalist at Coinography. She is graduate in Political Science and Journalism from London, her writing is centered around cryptocurrency news, regulation and policy-making across the glob.

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