Russia's finance ministry on Monday said it would take proposals on cryptocurrencies from the country's central bank into account so long as they do not contradict its own approach, paving the way for legislation governing digital assets.
A simmering dispute over cryptocurrency regulation in Russia heated up on Friday as the finance ministry submitted legislative proposals to the government that clashed with the central bank's demand for a blanket ban.
The Bank of Russia has proposed banning cryptocurrency trading and mining due to the threat digital currencies pose to financial stability. But the finance ministry prefers legislation that regulates cryptocurrencies, allowing them as an investment tool, but not as a means of payment.
The finance ministry's draft legislation aims to create a legal market for digital currencies, it said on Monday.
One proposal is for transactions involving the purchase or sale of cryptocurrency requiring customer identification, a move that may diminish one of cryptocurrencies' major selling points - their anonymity.
Other proposals include foreign cryptocurrency exchanges having to obtain a licence in Russia, and introducing financial literacy tests that determine how much individuals are permitted to invest.
Citizens who successfully pass the tests would be permitted to invest up to RUB 600,00 (roughly Rs. 58,020) in digital currencies each year, the finance ministry said. Those who fail would have an investment limit set at RUB 50,000 (roughly Rs. 48,400) annually.
The central bank also opposes cryptocurrency mining, whereby powerful computers compete against others hooked up to a global network to solve complex mathematical puzzles. The bank has warned of inefficient energy consumption and the environmental impact of the mining, while the finance ministry prefers to permit mining under a taxation basis.
The central bank did not immediately respond to a request for comment.
© Thomson Reuters 2022
Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
Affiliate links may be automatically generated - see our ethics statement for details.