Russia’s Ministry of Finance pushes for regulating crypto-currencies as derivatives

Maria Nikolova

The Ministry of Finance is set to submit its proposals on crypto-currency regulations to the government in a month and a half.

Russia’s Ministry of Finance is planning to propose rules for regulating crypto-currencies as derivatives. The statement was made by Russia’s Deputy Finance Minister Alexey Moiseev, who was quoted by information agency TASS. Mr Moiseev is known for his comments regarding crypto-currencies, especially for his statement about the possible legalization of Bitcoin and other crypto-currencies in Russia in 2018.

Mr Moiseev says that the proposals by the Ministry on the regulation of Bitcoin and its likes should be submitted with the Russian government in about a month and a half.

He stresses the necessity of the identification of those selling and buying crypto-currencies. Such a procedure, according to Mr Moiseev, should be compulsory. How such an approach will combine with the anonymity which is considered one of the key advantages of Bitcoin has yet to be seen.

Speaking to crypto-currencies regulation, let’s recall that Olga Skorobogatova, Deputy Governor at the Central Bank of Russia, has said that the regulator will publish proposals on the taxation of crypto-currencies in the end of June. In terms of taxes, Bitcoin and its likes will be treated like digital assets.

Elvira Nabiullina, Governor of the Bank of Russia, has struck a more skeptical note on Bitcoin legalization. She said last week there was no time frame on any potential legalization of Bitcoin and that the bank saw many risks of using this “asset”. Ms Nabiullina also said that the regulator was having its doubts about Bitcoin and that in its view there were no significant benefits from introducing digital assets in the Russian economy.

Although the rules for regulating digital currencies in Russia are yet to become reality, we have to note that the attitude of Russia’s authorities towards Bitcoin and blockchain has markedly changed over the past couple of years. On January 27, 2014, the Bank of Russia warned the public against using virtual currencies for exchange purposes. The bank referred to Article 27 of the law “On the Central Bank of the Russian Federation”, which bans the issue of money surrogates in the Russian Federation. The regulator stated back then that the provision of virtual currency exchange services by business entities will be treated as involvement in suspicious activities. These actions are considered violations of the laws on anti-money laundering and terrorism funding.

In contrast with this stance, earlier this month, Bank of Russia’s Olga Skorobogatova said the regulator was working on a national virtual currency.

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