Russia Moves Closer to Accepting Crypto as a Currency

Russia may soon become the latest country to accept cryptocurrency as a form of payment as the central bank and government agree on regulation.

The decision marks a shift in policy after the Bank of Russia last month proposed to outlaw cryptocurrency mining, trading and its usage. 

According to a report from the Ministry of Finance, cryptos will be classed as an “analog of currencies,” rather than digital financial assets. The proposal was approved after a meeting with Deputy Prime Minister Dmitry Grigorenko and will take effect on February 18th, 2022.

The report says crypto purchases may only be made with full identification via locally-registered and licensed companies. All data must be shared with government agencies. 

Transactions greater than $8,000 must be declared and unlicensed activities will be considered a criminal offense.

Russia and Regulation

Some of the new regulation on digital currencies will take effect in the second half of 2022 or from 2023, the report said.

Both the Bank of Russia and Rosfinmonitoring, Russia’s anti-money laundering agency, will monitor transactions.

Russia has an ambivalent stance on crypto as an asset class. It does not consider bitcoin to be legal tender and the Central Bank has historically considered cryptocurrencies a threat to the financial stability of the country.

Last week, Anton Siluanov, Russia’s Minister of Finance, repeated his ministry’s view that crypto should be regulated rather than banned, suggesting banks should take the lead. 

Siluanov claims Russians hold around $26bn in crypto assets, approximately 7% of the population.

Cryptocurrencies could account for 15% of Russia’s GDP. A recent report by a Russian outlet says that the government could collect 1 trillion rubles worth around $13 billion in digital currency tax every year.

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