Russia’s draft legislation will reportedly be drawn up by no later than Feb. 18 and is expected to regulate crypto as a form of currency.
The Russian government and the country’s central bank have reached an agreement to draft legislation or amend existing laws recognizing crypto as a form of currency, according to a statement on Tuesday.
The agreement is a significant reversal after the Bank of Russia last month proposed banning miners and several other crypto operations over concerns that they could endanger the country’s financial system.
News outlet Kommersant first reported the announcement on Tuesday. It is understood cryptos are to be classified as an “analogue of currencies” and not as financial digital assets. Legislation will reportedly be drawn up no later than Feb. 18.
“The establishment of rules for the circulation of cryptocurrencies and control measures will minimize the threat to the stability of the financial system and reduce the use of cryptocurrencies for illegal purposes since a complete ban on the segment of operations related to their circulation is impossible.”
Crypto’s use as currency will only be possible following proper identity checks via the country’s banking system or licensed intermediaries while operations exceeding R 600,000 ($8,016) must be declared, according to the document.
“The complete absence of regulation of this industry, as well as the establishment of a ban, will lead to an increase in the share of the shadow economy, an increase in fraud cases and destabilization of the industry as a whole,” the document reads.
There are additional plans to introduce an “obligation” for market participants to educate Russia’s citizens regarding the risks associated with digital assets.
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