Russia’s business ombudsman pushes for crypto-currencies use in Kaliningrad

Maria Nikolova

According to Russia’s Commissioner for Entrepreneurs’ Rights, Kaliningrad may see the establishment of an exchange for crypto-currencies.

Russia’s Commissioner for Entrepreneurs’ Rights Boris Titov has proposed testing of crypto-currencies circulation in Kaliningrad.

According to the business ombudsman, the geographical and political status of Kaliningrad will make it the perfect location for testing crypto-currencies, a report by Interfax says. Mr Titov added the lack of an explicit ban on the use of crypto-currencies.

He also proposed the establishment of an exchange of crypto-currencies in the region.

This is not the first time that Mr Titov throws his weight behind the use of crypto-currencies in Russia. Back in July last year, he said that legalization of Bitcoin would help Russia attract investments while avoiding sanctions from western countries.

The status of Bitcoin and other crypto-currencies in Russia remains questionable. Bank of Russia’s official stance was voiced in January 2014, with the “Megaregulator” referring to Article 27 of the law “On the Central Bank of the Russian Federation”, which prohibits the issue of money surrogates in the Russian Federation. The Bank of Russia stated that the provision of virtual currency exchange services by business entities will be considered as involvement in suspicious activities. These actions are treated as violations of the laws on anti-money laundering and terrorism funding.

Other institutions like the Ministry of Finance have initially supported the tough stance of the central bank. In fact, early in 2016, the Ministry of Finance drafted amendments to the Penal Code that would treat the issue and turnover of crypto-currency as serious criminal offenses, which entail prison sentences of up to 7 years.

Nevertheless, the regulatory climate for using crypto-currencies in Russia has become milder lately. The Ministry of Finance said it would reconsider its plans for harsh penalties regarding Bitcoin-related activities, as the Central Bank and the Federal Financial Monitoring Service said they did not see any threats from the use of crypto-currencies.

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