Cryptocurrencies have been allowed in Russia since January 1 of last year, but they cannot be used to purchase goods or services.
Russia recently approved a new cryptocurrency law that, although falling short of the previous cryptocurrency prohibition, imposes strict constraints on the use of cryptocurrencies as a form of cash.
In 16 months, Moscow will adopt a different route and integrate cryptocurrencies into its financial system.
‘Either Way, Sooner Or Later’
Denis Manturov, Minister of Industry and Trade, announced on Thursday that Russia will “sooner or later” recognize cryptocurrencies as a form of payment, implying that the government and central bank are nearing an agreement.
Moscow has declared plans to create a central bank digital currency, but has previously discouraged the use of private cryptocurrencies.
According to Manturov, the government and central bank may be making some progress (Bitcoin News).
The governor of the Russian central bank, Elvira Nabiullina, recently stated that the bank cannot tolerate cryptocurrency investments, which account for around $5 billion in yearly Russian transactions, and has suggested blocking their trading and mining.
However, according to Manturov, the government and central bank may be getting closer to an agreement.
Prior to Russia’s February 24 invasion of Ukraine, the finance ministry recommended legislative steps that were incompatible with the central bank’s demand for a total prohibition.
Russia Takes Steps to Legalize Cryptocurrency
Manturov was questioned at a forum if he thought cryptocurrencies would become legal as a form of payment.
“The question is, when this occurs, how it will be regulated, given that the central bank and government are actively working on it,” Manturov said.
“However, the general consensus is that… sooner or later, this will be implemented in some form,” the Russian official explained.
Since 2020, Russian banks have been allowed to establish cryptocurrency exchanges under the supervision of the central bank, and new digital currencies can be produced under the supervision of the central bank.
This shows a more pragmatic attitude to cryptocurrencies and their acceptability in Russia, as opposed to what some had predicted would be a near-total freeze on cryptocurrency activity in the country.
Moscow plans to launch its own digital rouble, but the Kremlin has only recently come around to supporting the use of private cryptocurrencies after years of claiming that they may be used to launder money or fund terrorists.
Other central bank officials warned last year that cryptocurrencies had no place in the Russian financial industry, citing the growing quantity of crypto transactions as a threat to financial stability.