Russia May Ban Crypto Trading and Usage After Central Bank Updates Draft Bill

Russia’s bill on digital assets has been revised and now includes a ban on crypto issuing and trading, says the Bank of Russia (BoR).

However, the central bank gave the impression that it’s in favor of digital financial assets, not to mention it ran in December 2019 a pilot tokenization program in its own regulatory sandbox. Meanwhile, Alex Guznov, the institution’s head of legal office, said BoR thinks crypto shouldn’t be legal in Russia. Here are his exact words:

“We believe there are big risks of legalizing the operations with the cryptocurrencies, from the standpoint of financial stability, money laundering prevention and consumer protection.”

BoR Was Active During the Digital Assets Legislation Discussions

The BoR had a very active role in the discussions on digital assets, discussions that have been taking place in the parliament ever since the spring of last year. It contributed to the second bill’s draft in autumn 2019, trying to clarify what’s required for issuing crypto tokens, such as a report capital of 5 million rubles ($660,000) and the ability to allow access to law enforcement to the ledger. BoR remains reluctant when it comes to making tokens that aren’t securities, such as Bitcoin (BTC) and Ether (ETH), legal in the country.

Circulating Crypto Poses an Unjustified Risk

Here’s what Guznov said about the circulation of cryptocurrencies:

“Legalization of issuance and, which is even more important, circulation of cryptocurrencies pose an unjustified risk, which is why the [future] law prohibits issuing and organizing the market for cryptocurrencies, and also introduces the punishment for violating the ban.”

For as long as people who own crypto deal in non-prohibiting jurisdictions, they will not be punished, but the bill wants to make it illegal for institutions to use and trade crypto. It’s possible that the bill will pass during the parliament’s spring session, this year.

Other Voices Against Crypto in Russia

Back in October 2017, Elvira Nabiullina, the chairwoman for Russia’s financial regulator, said cryptocurrencies should not be legal in the country. In the autumn of last year, she also mentioned that Russia doesn’t need to have a national digital currency. As said before, back in December 2019, the BoR ran a tokenization project in partnership with the smelting and mining company Nornickel.

Nornickel wants to tokenize the copper, palladium and cobalt it extracts and to sell it as stablecoins backed by these metals. At the moment, it’s testing its tokens’ marketplace. Guznov said stablecoins such as the ones from Nornickel are included in the digital assets bill’s framework too.

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