RUSSIA offering legal cover for cryptocurrencies

Russia is offering legal cover for cryptocurencies as Central banks dissent. Finance Ministry published draft legislation to regulate operations using cryptocurrencies, putting it at odds with the central bank’s resistance to allowing their exchange into rubles and other currencies.

President Vladimir Putin said this month that the central bank is right to be cautious about the increasingly popular financial instruments. He said that Russia shouldn’t repeat past experiences in which investors were swindled.  At an October meeting he called for regulation of cryptocurrencieswhile telling officials “not to put up too many barriers.”. Bank of Russia Governor Elvira Nabiullina and Finance Minister Anton Siluanov attended this meeting.

Licensed operators would be able to validate conversion of cryptocurrencies into other digital instruments as well as rubles or foreign currencies, according to the bill. Digital assets themselves wouldn’t be legal means of payment in Russia. The proposals also set out measures for domestic regulation of initial coin offerings.

The Bank of Russia opposes the exchange of cryptocurrencies into other assets. It wants to allow operations for ICO tokens only, the Finance Ministry said in a statement Thursday. A legal ban on such operations would create conditions for criminal use of cryptocurrencies. Trading via licensed operators would increase tax revenues, according to the ministry.

Another law that introduces the term “money surrogates” is almost ready. It will support the ruble’s status as the only legal means of payment, the ministry said.