After years of uncertainty over cryptocurrency regulation, Russia is further confusing its proposed crypto law as the country’s central bank made yet another statement on the matter.
According to a Bank of Russia legal director, the country’s major but not yet completed cryptocurrency laws – a bill “ On Digital Financial Assets ” – will ban the issuance and circulation of cryptocurrencies.
Alexey Guznov, head of the Russian central bank’s legal department, revealed the news on March 16 in an interview with the local news agency Interfax.
While the original “On Digital Financial Assets” bill stipulated that cryptocurrency trading would be allowed in Russia, the amended document will apparently ban almost everything about crypto except its possession, according to Guznov’s latest comments.
The official said the upcoming law will explicitly prohibit the issuance and distribution of cryptocurrency and will introduce sanctions for violating this law. Guznov stated:
“In terms of the functioning of the financial system and the consumer protection system, legalizing the issue and facilitating the circulation of cryptocurrencies is an unjustified risk. As such, the bill explicitly prohibits the issue and organization of cryptocurrency circulation, introducing legal liability for violating these rules. ”
Besides the crypto bill banning Russian financial institutions from issuing digital assets, Guznov gave little clarity about the upcoming bill. When asked whether the Bank of Russia wants to prohibit residents from converting crypto into local fiat currency, the Russian ruble or a foreign currency, Guznov did not provide a direct answer.
Instead, the director reiterated his view that the central bank opposes institutions that issue cryptocurrencies, adding that the bank would be unable to impose certain limits on transactions in Bitcoin (BTC):
“If a person who owns Bitcoins, for example, completes a transaction in a jurisdiction that does not prohibit it, we are unlikely to be able to settle it.”
The latest comments on Russia’s upcoming cryptocurrency regulations come after years of uncertainty and multiple delays in providing regulatory clarity. President Vladimir Putin, first introduced in January 2018, has twice ordered the adoption of the bill “On Digital Financial Assets”, but legislation has not yet been finalized.
While the Russian Treasury Department is trying to legalize cryptocurrencies in the country, the central bank has apparently been fighting to ban the Russians from using crypto legally.
In February 2020, the Bank of Russia issued a set of rules for suspicious transactions, with each crypto-related transaction classified as a potential money laundering risk.
Although the central bank prohibits local entities from issuing their own digital assets, it has considered issuing its own digital currency. In December 2019, the head of the bank, Elvira Nabiullina, said the institution was investigating the possibility of issuing a digital ruble.
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