Cryptos in Russia: Ministry of Finance and Central Bank have to agree on cryptos by December

The Russian Prime Minister has ordered the Ministry of Finance and the Central Bank to come to an agreement on cryptos. According to local media reports, the Russian government has until December 19, 2022 to reach a consensus.

A policy in stark contrast?

Russia has always shared a relatively complex relationship with the crypto sector. The country’s Central Bank has long expressed skepticism about cryptocurrencies. According to its leaders, this industry is constantly subject to financial stability problems and risks of scams of all kinds.

In fact, the Central Bank has advocated for a total ban on crypto trading and mining in Russia. A policy that is in stark contrast to the Russian government, which is eager to regulate the industry in order for it to flourish.

In August, Mikhail Mishustin described digital assets as a “safe alternative” for cross-border payments.

In early September, in a television interview, Russia’s Deputy Finance Minister Alexei Moiseev clarified that the Bank of Russia, historically opposed to cryptocurrencies, had finally rethought its approach to the point of being supportive of the use of such assets for cross-border payments.

Still according to the deputy minister, however, a very precise framework must be defined to allow the use of the latter:

“Now people are opening cryptocurrency wallets outside the Russian Federation. It has to be possible to do this in Russia, it has to be done by entities supervised by the Central Bank, which are required to comply with the requirements of the anti-money laundering legislation, and above all, of course, to know their customer.”

Submit concrete proposals for the future of cryptos by December

Faced with this contradiction between the two sides, Russian Prime Minister Mikhail Mishustin has thus asked the Ministry of Finance to prepare, together with the Bank of Russia, and submit concrete proposals for the future of the digital financial assets (DFA) market in the Russian Federation by December.

This draft from the Russian government serves to highlight a particularly clear fact: Russia is beginning to place greater importance on crypto issues as it relates to cross-border transactions.

Nevertheless, Russia’s position on digital assets remains tricky and difficult to grasp. Indeed, although the government has expressed its desire to allow cross-border crypto transactions, the Russian Central Bank is still opposed to the legalization of exchanges and the use of these assets as a means of payment.

These new regulations continue to raise many questions, as Russia has yet to introduce a framework that would provide laws on the matter.

The Russian authorities feel the need to regulate cross-border payment systems because of the need to simplify access to the Russian financial market for foreign investors and issuers. The government needs to implement a remote identification mechanism if they want cross-border transactions to proceed smoothly.