Russian finance ministry to consider central bank proposals on cryptocurrencies

Russia’s finance ministry said Monday that it will consider proposals from Russia’s central bank on cryptocurrency. This is to ensure Russia has the legal framework for digital assets legislation.

The simmering controversy over Russia’s cryptocurrency regulation heated up Friday when the finance ministry presented legislative proposals to government that were in direct contradiction to the central bank’s call for a blanket ban.

Due to the financial instability that digital currencies present, the Bank of Russia proposed banning cryptocurrency mining and trading. The finance ministry favors legislation that regulates cryptocurrency, which allows them to be used as an investment tool but not as a payment method.

It stated Monday that the draft legislation of the finance ministry aims to create a legal marketplace for digital currencies.

One suggestion is to require customer identification for transactions involving cryptocurrency purchases or sales. This could reduce one of the most attractive features of cryptocurrencies – their anonymity.

Another proposal is to allow foreign cryptocurrency exchanges to be licensed in Russia and to introduce financial literacy tests to determine the maximum amount of investment allowed.

The finance ministry stated that citizens who pass the test will be allowed to invest up 600,000 rubles ($7,853) each year in digital currencies. Failures would be subject to a maximum investment limit of 50,000 rubles per year.

The central bank is also against cryptocurrency mining. This involves computers competing against each other to solve complex mathematical puzzles.

While the bank warned about inefficient energy consumption, and the environmental impacts of mining, the finance ministry prefers that mining be allowed under taxation.

The central bank did no immediate response to a request for comments.