Russia Ministry of Finance has advanced its plan to regulate the crypto sector by introducing a cryptocurrency bill to parliament, despite a public spat with the country’s central bank over how to handle the asset class.
Despite the central bank’s objections to regulating the burgeoning industry, Russia’s Ministry of Finance has submitted a draft crypto bill to parliament. According to a press release issued by the Finance Ministry on Monday, the proposed bill, which was submitted on February 18, would allow Russian citizens to invest in digital assets such as bitcoin but not use them to pay for goods and services.
According to the announcement, the use of digital currencies as a means of payment in the Russian Federation will remain illegal. Digital currencies are only regarded as a tool for investment within the framework of the proposed regulation.
It went on to say that the proposal does not seek to make cryptocurrencies legal tender. Furthermore, crypto exchanges and OTC desks will be required to meet certain criteria in order to obtain a license and register with the government.
For a long time, Russia’s government and central bank have been at odds over how to approach cryptocurrencies in the country.
Unlike the Finance Ministry, the Bank of Russia insists on a complete ban on crypto mining and trading, citing concerns about the country’s financial stability and volatility.
The Ministry of Finance stated in the statement that the central bank’s concerns will be considered in future work on this bill where they do not contradict the Ministry of Finance’s approach.
The Finance Ministry’s legislation also specifies that crypto transactions must be conducted only through bank accounts. Furthermore, both cryptocurrency platforms and banks require users to go through know your customer (KYC) checks.
Customers must also be informed of the risks associated with crypto investments by exchange operators. Retail investors will be required to pass an exam that assesses their knowledge of cryptocurrencies and the risks associated with them. Those who pass the online tests can invest up to 600,000 Russian rubles per year in cryptocurrency, while those who do not can only invest 50,000 rubles per year, according to the press release. There will be no yearly limits for businesses or qualified investors.