Media: Russia proposes ban on cryptocurrency circulation

The Russian Finance Ministry proposes banning the organization of cryptocurrency circulation, with the exception of stablecoins and the sale of coins by miners. The amendments will be added to the draft law regulating digital asset mining, according to the Media, citing an informed source.

According to the information, this concerns preventing the organization of services that facilitate civil-law transactions or transfers of digital currencies from one holder to another through Russian exchanges and crypto ATMs.

However, the initiative has drawn opposition from the FSB and the Investigative Committee. In their view, these changes effectively amount to a ban on organizing the circulation of digital currency as such, which is not supported by “concrete arguments”.

In the FSB’s conclusion, the definition of organizing the circulation of digital currency must “thoroughly reveal all the features of this process”.

The Investigative Committee warned that the Finance Ministry’s proposed formulations could cause confusion between “a ban on organizing the circulation” and “a ban on circulation,” which, in turn, would lead to legal uncertainty.

Moreover, the agency believes that, in the long term, a ban on the turnover of cryptocurrencies could boost the share of the shadow economy, spur crime and fraud, and destabilize economic relations.

Currently, in Russia, deals involving the purchase and sale, circulation and issuance of cryptocurrencies are allowed. However, using such assets as a means of payment and advertising such a possibility is not permitted.

The mining-regulation bill has been registered in the State Duma since mid-November 2022. It obliges individuals and legal entities to report mined cryptocurrencies to the tax authorities, indicating the address to which they are credited. Its adoption is expected in 2024.