Russia Seeks to Legislate Digital Currencies

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Russia’s finance ministry Monday revealed that it would be taking in proposals revolving around digital currency from the Central.

The Bank of Russia creates a legal sphere of cryptocurrency markets dictated by the state-enforced guidelines and a defined network of users. Despite being a global hub for crypto-mining, Russia has been tight-lipped over the risks of illegal activities and the need for thorough surveillance.

The announcement of the prospects of legalization came amid a fiery debate over the regulation of cryptocurrency in Russia. Nevertheless, the legislative proposals to the government still clash with the central bank’s demand for a blanket ban as it has earlier proposed banning cryptocurrency trading and mining due to the financial stability that these digital currencies substantiate. But, on the other hand, the finance ministry sees the legislation not only as an investment tool but not as a means of payment to keep up with the west.

One of the proposals mentioned is about the transactions that involve the purchase or sale of cryptocurrency also requiring customer identification. But this again hinders the very objective of user anonymity.

 Apart from this, the proposals also include foreign cryptocurrency exchanges that would have to obtain a license in the country and professing financial literacy tests that would put a cap on the spending capacity of the users by determining their investing power. For that, the users who will pass the test successfully would be allowed to invest up to 600,000 roubles ($7,853) in digital currencies each year, the finance ministry said. At the same time, those who fail would have an investment limit of 50,000 ($62.45) roubles annually.

Another area of dispute is cryptocurrency mining. While the central bank also opposes cryptocurrency mining for its inefficient energy consumption and the environmental consequences, the finance ministry prefers to permit it only under a taxation system.

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Roopashi Semalty

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