Russian Government and Central Bank Agree to Treat Bitcoin as Currency – Russia’s government and central bank have reached an agreement on how to regulate cryptocurrencies, according to a Tuesday announcement.
Russia’s government and central bank are now working on a draft law that will classify cryptocurrency as an “analog of currencies” rather than digital financial assets, which will go live on February 18. Only full identification via the banking system or regulated intermediaries will allow cryptocurrencies to operate in the legal sector.
Bitcoin (BTC) transactions and cryptocurrency holding are not outlawed in the Russian Federation, according to Kommersant, but they must be done through a “digital currency exchange organizer” (a bank) or a peer-to-peer exchange licensed in the country.
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According to the study, bitcoin transactions worth more than 600,000 rubles ($8,000) must be declared; otherwise, they may be considered criminal conduct. Fines will be imposed on those who illegally take bitcoins as payment.
This development follows months of speculation over Russia’s approach to digital currency. While it is unclear what this decision will mean for Russian businesses and residents, it appears that the country is warming to the idea of cryptocurrency.
The Bank of Russia called for a nationwide crypto prohibition in a study released in January, noting the industry’s speculative nature. The bank also stated that financial institutions should not facilitate crypto transactions as part of its recommendation to restrict digital assets.
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The plan, however, was met with criticism from the Russian Ministry of Finance. A few days after the central bank proposed a ban, Ivan Chebeskov, a ministry official, indicated that the government should regulate crypto instead of outright prohibit it. He warned that imposing a total ban will put Russia behind the times technologically.
According to reports, President Vladimir Putin is in favor of regulating the country’s crypto mining industry.