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Russia likely to recognise, regulate cryptocurrency as form of currency in 2022: Report

Russia likely to recognise, regulate cryptocurrency as form of currency in 2022: Report

By CNBCTV18.com Feb 9, 2022 3:05:07 PM IST (Published)

The government and the Bank of Russia have agreed on a future regime for the circulation of cryptocurrencies in Russia, a local media report said.

Russia may soon become the latest country to recognise cryptocurrency as a form of currency as the government and the country’s central bank have reached an agreement on how to regulate the digital asset, local media reports suggest.

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“The government and the Bank of Russia have agreed on a future regime for the circulation of cryptocurrencies in Russia. Before February 18, they will prepare a draft law on the circulation of digital currencies in the Russian Federation, in which cryptocurrencies are recognised as an analogue of currencies, and not digital financial assets,” Russian newspaper Kommersant said on Twitter and also published a report on the same.
According to the report, cryptocurrencies’ circulation in the legal sector will be possible only with full identification through the banking system or licensed intermediaries.
The development comes weeks after Russia's central bank called for a blanket ban on cryptocurrencies. The ban, proposed in January, prohibits cryptocurrency trading, mining as well as usage. If the law comes into force, only owning cryptocurrencies will be allowed in Russia and no other related activities, according to reports.
Russian authorities granted cryptocurrencies legal status in 2020, but their use in payments was never authorised. For many years, Russia has argued against cryptocurrencies over concerns that they can be used for illegal activities and therefore, called for regulation.
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"The use of cryptocurrencies creates significant threats to the well-being of Russian citizens and the stability of the financial system," a report published by the central bank said.
However, according to the latest Kommersant report, Russia’s Finance Ministry and Bank of Russia must by February 18 formulate either a separate bill or amendments to the law on CFA and other laws for its implementation. It is likely that at least part of the new regulation on digital currencies will be enforced in the second half of 2022 or from 2023, the report said.
People in Russia are not prohibited to possess or transact cryptocurrencies but only via the organizer of the digital currency exchange system, which is a bank with a universal license or a p2p exchanger legalised in the Russian Federation, the report added.
Meanwhile, the report suggests that crypto transactions of over 600,000 rubles (roughly $8,000) shall be declared illegal and considered a criminal offence. Fines will also be levied on those who illegally accept crypto as a means of payment.
(With inputs from  agencies)
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