Russia Will Not Ban Crypto; Here’s Why!

The Central Bank of Russia had proposed a blanket ban on crypto just recently, however, there has been a change of plans. The Russian Government has now initiated a formation of a roadmap that will be responsible for introducing restrictions on cryptocurrency.

Related Reading | Russia’s Central Bank to Ban on Crypto Mining and Trading 

This roadmap in a way will facilitate an adoption with adequate curtailment of cryptocurrency, this will help to keep financial instability at bay. The roadmap is approved by the Russian Government and shall be presented to the public by the end of this year. This decision to introduce the roadmap goes against the Bank of Russia’s call to put a blanket ban on cryptocurrency. 

The working group members were from finance, digital, and even interior ministries along with the Central Bank, FSB, and the security service department. The Deputy Prime Ministry, Dmitry Chernyshenko has approved the roadmap for cryptocurrencies.

What this roadmap seeks to provide is a regulatory framework within which the cryptocurrency market would operate. It doesn’t want to ban cryptocurrencies but instead intends to focus on current violations that the industry witnesses, along with keeping an eye on the functioning of various crypto platforms.

What Exactly Do These Regulations Encircle

The Central Bank, through this roadmap, believes in having a regulatory and restrictive framework for cryptocurrencies. This change in stance comes after Putin insisted on arriving at a consensus regarding this matter.

He even agreed and acknowledged that although cryptocurrency carries a certain amount of risk that majorly stems from the volatile nature of the asset, cryptocurrency mining ensures a lot of competitive advantage to the nation. 

Since Russia has the advantage of being able to provide cheap electricity, it continues to remain the third-largest nation for crypto mining. 

“The central bank does not stand in our way of technical progress and is making the necessary efforts to introduce the latest technologies in this area of ​​activity,” ensured Putin. 

Primarily the regulatory body suggests having a Know Your Customer (KYC) feature and also Anti-Money-Laundering regulations for various cryptocurrency platforms. Not only that, but cryptocurrency platforms will also be provided with defined regulatory status for more awareness, a mandatory supervising body, and strict penalties for those who flout the rules and regulations. 

Other Key Aspects Of The Regulation

One of the most imperative features from the regulatory framework happens to be that cryptocurrency brokerage will be conducted through all Russian banking organizations solely. In order to implement this change, the Central Bank might stop other foreign crypto exchanges from operating in India.

Related Reading | Russian Authorities Consider Proposed Crypto Mining Project Using Associated Petroleum Gas

The rough timeline of events provided states that by May 22, the Russian government will be looking into the compliance control system. This particular stage will involve work around the attributes and functionality of the compliance control system. By the end of November, however, (FATF) Financial Action Task Finance for money laundering will introduce a system of regulations.