Instead Of Being Banned And Out Of Technology, Putin Supports The Regulation And Use Of Cryptocurrencies

Russia now prefers to regulate the use of cryptocurrencies in its country. (photo: doc. unsplash)

JAKARTA - The government and the Central Bank in Russia have reached an agreement on how to regulate cryptocurrencies. They announced this agreement Tuesday, February 8, Moscow time.

The Russian government and the Russian Central Bank, are now working on a draft law that would define crypto as an “analog currency” rather than a digital financial asset that will be launched on February 18. Cryptocurrencies will function in the legal industry only if they have complete identification through the banking system or a licensed intermediary.

Kommersant noted that Bitcoin (BTC) transactions and cryptocurrency holdings in the Russian Federation are not prohibited. However, they must be done through a “digital currency exchange manager” (bank) or peer-to-peer exchange licensed in the country.

The report also highlights that cryptocurrency transactions of more than 600,000 rubles ( ) should be announced. Otherwise, it could be considered a criminal act. Those who illegally accept cryptocurrency as payment will be fined.

This news comes after months of speculation about how the Russian government will handle digital currency. While it's still unclear what this decision means for businesses and citizens in Russia, it seems the country is slowly starting to warm up to the idea of cryptocurrencies.

In January, the Bank of Russia called for a nationwide crypto ban in a report warning about the speculative nature of the industry. The bank also stated that financial companies should not facilitate crypto transactions as part of a proposal to ban digital assets.

However, the proposal met with opposition from the Russian Ministry of Finance. A few days after the central bank's call for a ban, Ivan Chebeskov, a ministry official, as reported by Cointelegraph, said that the government should regulate crypto rather than ban it completely. He warned that a total ban could cause Russia to lag in technology.

Reports have also emerged that the Russian President, Vladimir Putin, supports efforts to regulate the country's crypto mining sector.