Finance Ministry of Russia Submits Proposal For Crypto Regulation
Russia’s Ministry of Finance has submitted a draft bill on crypto regulation in the country, weeks after the government approved the concept of creating legislation specifically for cryptocurrencies.
“The use of digital currencies as a means of payment on the territory of the Russian Federation will continue to be prohibited. Under the proposed regulation, digital currencies are considered solely as an investment vehicle.”
Bank of Russia and the Ministry of Finance hold opposing views regarding the cryptocurrency regulation in the country. The ministry has strived to accommodate the burgeoning technology into a legal framework, while the central bank has called once and again for a complete ban on the trading and mining of bitcoin.
Earlier this month, the Putin’s government gave the ministry the green light to propose a bill encompassing the regulation of cryptocurrency, effectively discarding the Bank of Russia’s suggestions that the proliferation of bitcoin should not be allowed in the country and outlining an initial plan for the legislation.
The decision to move forward with regulation instead of a ban came on the heels of signals sent by Russian President Vladimir Putin, who in late January highlighted the country’s competitive advantages in bitcoin mining.
Taking tests to be eligible to invest
If approved the new crypto regulations in Russia would see citizens taking online tests before being allowed to invest in cryptocurrencies. This stipulation is part of plans to create a legal framework for virtual currencies in the country.
The testing requirement is to ensure that citizens are acquainted with the risks associated with crypto investing. If the proposal is passed, Russians will have to take an online test before they can buy crypto.
Russians will have to provide their personal information to buy or sell bitcoin on regulated exchanges, though it is still unclear how much information will be necessary. Users will also only be allowed to buy about $7,700 worth of bitcoin per year upon successful completion of a testing procedure to assess their knowledge level of cryptocurrency. If they fail the test, they will only be able to purchase up to roughly $650 worth of bitcoin per year.
This testing requirement is also on top of strict know-your-customer (KYC) identification protocols prescribed by the draft policy. Also, crypto trading platforms will be asked to maintain registers containing identifying information about all customers.
As part of the draft crypto regulations, exchanges will also have to come under a licensing regime. As part of the draft crypto regulations, a designated authority will monitor the compliance of cryptocurrency trading platforms.
This monitoring will cover matters such as risk management systems, corporate governance, and internal audits. Platforms will submit documents showing the crypto held by customers and the exchanges themselves.
While the draft crypto regulations seek to legalize cryptocurrencies in Russia, the document still stated that virtual currencies will not be recognized as a means of payment. Instead, the finance ministry is calling for crypto to be designated as an investment vehicle.
