Russia’s Ministry of Telecom and Mass Communications submits draft decree on cryptocurrency and related tech

In the face of the fierce opposition from financial regulators regarding cryptocurrencies like Bitcoin in Russia, the Ministry of Telecom and Mass Communications has taken a step towards developing some form of regulation for the booming crypto sector.

Nikolai Nikiforov, Russia’s Minister of Telecom and Mass Communications, was quoted by information agency TASS as saying that the ministry has submitted a draft decree with the government on the matter of regulating cryptocurrencies. He explained that the document specifies the technical aspects of the technologies related to cryptocurrencies, including blockchain.

Mr Nikiforov noted that a single decree would not be sufficient for regulating the sector and that amendments to existing laws may be necessary. Moreover, he noted, the Central Bank of Russia and the Ministry of Finance will have the final say on these matters.

Let’s note that the latest comments by Bank of Russia top officials concerning Bitcoin and its likes have been rather stark. Earlier this month, Sergey Shvetsov, First Deputy Governor of the Bank of Russia, said that the central bank and the prosecutors are working together to close the foreign websites that offer Russian residents to buy cryptocurrencies.

Mr Shvetsov added that all derivative instruments related to cryptocurrencies are seen as negative phenomena by the “Megaregulator”. The central bank is not supporting these instruments and will implement measures to limit all operations with them for the regulated part of the Russian market. He also said that Bitcoin has become a means for getting artificially high returns for a very short period of time, something that is characteristic of financial pyramids.

During a meeting with government officials, Central Bank of Russia officials and business representatives on October 10th, Russia’s President Vladimir Putin voiced his concerns about the use of cryptocurrencies. He emphasized that there is a risk of using them for money laundering, tax avoidance and financing of terrorism. Mr Putin also stressed that there is no legally responsible entity behind cryptocurrencies, and this means that in case the “bubble bursts”, there will be no one to protect investors.