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Russian Finance Ministry submits crypto regulatory framework for review

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In a new twist in the Russian crypto regulatory tale, the country’s Ministry of Finance has proposed a plan that is diametrically opposed to the central bank’s harsh stance.

The Russian Central Bank recently proposed a nationwide ban on cryptocurrency trade and mining. The central bank published a study calling on regulators to enforce a blanket prohibition. And impose harsh sanctions on violators, citing volatility, environmental effect, and usage in illegal operations.

The Russian Ministry of Finance, on the other hand, opposed to the suggestion. Ivan Chebeskov, a ministry official, indicated a few days following the central bank’s request for a ban that the government should manage cryptocurrency rather than outright prohibit it. Chebeskov stated that the government should allow the industry to expand, and that a complete prohibition would cause Russia to fall behind in technology.

According to RBC, the ministry addressed a letter to Dmitry Chernyshenko, the Russian Federation’s deputy chairman of the government, and formally filed a regulatory proposal to the government on Thursday. The plan establishes a new framework for cryptocurrency use in the country, recommending that crypto activities be conducted through standard banking infrastructure, with procedures in place to identify traders’ personal data.

Advantages of crypto regulations

According to the government, regulating cryptocurrency can have a number of advantages. Including higher tax revenue and improved law enforcement’s ability to detect illegal activity.

According to the ministry, Russian residents own crypto valued at roughly 2 trillion Russian rubles. And a comprehensive prohibition or lack of regulation will eventually damage the industry. And lead to the creation of a black market.

Telegram creator Pavel Durov also expressed his displeasure with the potential crypto prohibition. A prohibition, according to the tech executive, may not deter “unscrupulous participants”. But it will have an impact on compliant and lawful blockchain ventures. A prohibition, he warned, would stymie the development of blockchain-based solutions.

In a meeting with government officials, Russian President Vladimir Putin emphasised some of the benefits of cryptocurrency. “We have certain competitive advantages here as well,” Putin added, referring to the so-called mining industry. After that, the president urged the administration and the central bank to achieve an agreement on the issue.

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