Despite the Bank of Russia’s statements on the supposed risks of allowing Bitcoin to grow in Russia, The Russian President, Vladimir Putin, has emphasized supporting the government’s efforts to regulate the asset class.
The Russian government is now supporting the creation of complete regulations for Bitcoin and cryptocurrencies, as members consider the potential negative consequences of outrightly outlawing the industry, as the central bank has urged.
After stressing that the central bank will not stand in the way of technical progress, President Vladimir Putin said in a meeting with government officials that Russia has “certain competitive advantages” in bitcoin mining, including a power surplus and well-trained labor.
Following Putin’s remarks, Deputy Prime Minister, Dmitry Chernyshenko signed a roadmap that will last until the end of the year, according to RBC. The paper specifies Bitcoin legislation, customer identification, liability for infractions, and the prospect of cryptocurrency lending platforms and related assets being established in the country.
According to local state-owned news agency RIA Novosti, Andrey Lugovoy, first deputy head of the State Duma’s Committee on Security and Anti-Corruption, said that the legislature will support the government’s roadmap for regulating cryptocurrencies because he considers an outright ban on the market “unconstructive” because it risks the establishment of a “black market” in the economy.
“When we talk about digital financial assets, cryptocurrency, and the crypto market, we must understand that we are not just trying to amend certain bills; we are trying to regulate a new entity that the entire world is facing, and we must determine our position,” Lugovoy added.
The roadmap, according to RBC, is the result of a collaborative effort involving representatives from various departments and agencies, including the Ministries of Finance and Economic Development, the Prosecutor General’s Office, the Federal Security Service, and Tax Service, the Ministries of Internal Affairs and Digital Development, and the Bank of Russia. Except for the central bank, all of the entities involved are said to have backed the suggestions in the memo.
Elizaveta Danilova, the Head of Financial Stability at the Bank of Russia, warned that comparing Bitcoin to money is “incorrect and very dangerous,” because digital currency is a “risky” tool even if it is regulated.
Danilova stated, “These risks will be enormous, and we expect that more and more countries will come to the conclusion that cryptocurrencies should be prohibited.” “Some people incorrectly think they’re money, but they’re not.”
Danilova added that she believes it to be impossible to equate bitcoin and cryptocurrencies to stocks and bonds as the new assets have “no fundamental value” and “look like a financial pyramid.”
Despite the fact the Bank of Russia’s views on cryptocurrency trade and mining are diametrically opposed to the government’s position, Danilova suggested they may reach an agreement as asked by Putin, emphasizing that the central bank does not have the authority to propose legislation.
“In any case, we must coordinate the proposed measures with the government, with our parliament, The State Duma, the Federation Council – we will actively communicate with all these parties now,” she added.
Days ago, the Bank of Russia advocated for a complete ban on bitcoin and cryptocurrency trade, ownership, and mining, but the Ministry of Finance soon responded with caution, warning that such a course could cause Russia to fall behind in the fast-paced technology industry.
Last year, bitcoin miners went to Russia as a result of a Chinese ban on the industry, which resulted in a mass outflow of ASIC devices. The chilly temperature and energy-rich regions of this Eastern European country create ideal circumstances for mining to flourish.