Breaking: Is Russian Crypto Regulation Under Threat?

Top Russian officials have failed to reach a deal on how to regulate crypto despite President Vladimir Putin’s request for them to find a compromise.

Russia’s Central Bank Chief Elvira Nabiullina has voiced her opposition to Russian Plans to legalize cryptocurrency. Despite the request by President Vladimir Putin to hammer out a compromise formula, top government officials failed to reach an agreement on how to regulate cryptocurrencies at a meeting Tuesday.

Russian officials fail to reach a consensus

Elvira Nabiullina, Bank of Russia head, Finance Minister Anton Siluanov, and Deputy Prime Minister Dmitry Grigorenko had hectic parleys but failed to reach a consensus on managing cryptocurrencies. People familiar with the matter wanted to remain anonymous because the meeting was not public. There were also no comments forthcoming from the press service of either the central bank or the Finance Ministry. A spokesman for Grigorenko did not immediately respond to a request for comment.

In January, President Vladimir Putin had asked for a quick solution, but authorities have not hammered out a clear-cut policy towards cryptocurrencies. Kommersant newspaper reported last week that the Finance Ministry and Central Bank were to prepare a draft law on the matter by February 18. However, the Central Bank has proposed a ban on cryptocurrency, citing too many risks. Bloomberg also confirmed seeing a letter Friday from Nabiullina to Siluanov which proposed the ban on Crypto.

Russian regulator feels that cryptocurrency is akin to a pyramid scheme and puts the investors, financial system, and economy at grave risk. Therefore, the government wants to regulate digital currencies to bring them out of the shadows and attract investment.

Existing Russian laws acknowledge crypto assets but forbid them as a currency for payment. In other words, cryptocurrency remains a largely unregulated sector. Nevertheless, a recent government paper estimated Russians own about 2 trillion rubles ($26 billion) in Crypto.