Russian Ministry of Finance and Central Bank Seek Agreement on Crypto Regulation
The Russian Ministry of Finance is working towards resolving its differences with the Central Bank regarding cryptocurrency regulation. Finance Minister Anton Siluanov expressed confidence that an agreement would be reached soon.
Stalemate over Crypto Regulation
For years, the Ministry of Finance and the Central Bank have been at odds over how to approach cryptocurrency regulation in Russia. While the ministry aims to regulate and tax crypto exchanges and traders, the bank has advocated for a complete ban on all crypto-related activities, similar to China’s approach.
In early 2022, the ministry introduced a comprehensive draft bill on crypto regulation in an attempt to break the impasse. However, neither the ministry’s bill nor the bank’s rival bill proposing a ban made it past the committee stage at the State Duma, leaving the crypto sector in limbo.
External Factors Influencing Change
The ongoing war in Ukraine and resulting Western sanctions seem to have prompted a change in stance from the Russian Central Bank. The bank has reluctantly softened its position on cryptocurrency and agreed to make some concessions regarding its use as a payment tool in international trade.
Finding Common Ground
Finance Minister Siluanov sees potential for collaboration with the Central Bank on cryptocurrency legislation. He believes that working together is necessary to explore options for using cryptocurrencies for settlements within Russia and abroad.
Possible Concessions in Crypto Mining
Siluanov also revealed that discussions about cryptocurrency mining are underway between the ministry and the bank. While it is unlikely that sweeping concessions will be made, there may be room for compromise regarding the use of mined tokens for external payments.
However, Governor Elvira Nabiullina, who has long been opposed to crypto’s integration into the Russian economy, is unlikely to support significant concessions.
Potential Tax Revenue from Legalizing Mining
Legalizing the cryptocurrency mining industry in Russia could bring substantial tax revenue for the state. Industry experts estimate that it could generate around $540.3 million in tax revenue. Additionally, the establishment of multi-purpose data centers for mining operations could save Moscow approximately $32.4 million in tech investment.
Miners in Russia have expressed frustration with the lack of clear regulations surrounding their industry, which has left them operating in a legal gray area. They have also voiced concerns about proposed electricity tariff hikes by the Ministry of Energy.
Hot Take: A Step Towards Crypto Regulation in Russia
The Russian Ministry of Finance and the Central Bank are making efforts to bridge their differences and establish crypto regulation in the country. While there is still a long way to go, this development signifies a potential shift towards acknowledging and accommodating cryptocurrencies within Russia’s financial landscape.
By finding common ground and exploring options for crypto settlements, Russia may be opening doors for increased adoption and integration of cryptocurrencies in its economy.
Sources: RBC
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