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Russian Finance Ministry proposes cryptocurrency trading be allowed via banks in the country

While some countries have imposed an outright ban on cryptocurrencies, Russia seems to be adopting a middle ground sort of approach. The country’s Minister of Finance, Anton Siluanov has proposed setting up a framework that will allow for effective regulation of cryptocurrency rather than banning it. Siluanov also said his ministry favors cryptocurrency trading via banks to be made legal in the country.

As per what Siluanov is suggesting, banks would serve as authorized outlets for carrying out cryptocurrency exchanges. Other companies that wish to provide cryptocurrency exchange services will have to obtain a license for the same. Companies that are caught providing exchange services without the necessary permission will be prosecuted for criminal offenses.

The proposal put forth by the finance ministry also includes making the Bank of Russia and Rosfinmonitoring, the anti-money laundering (AML) agency in Russia by given complete access to all information regarding all transactions involving cryptocurrency in the country. Plus, those involved in providing crypto lending services should be using the Transparent Blockchain transaction tracking system for effective monitoring.

Interestingly, Siluanov’s stance on cryptocurrency is in sharp contrast to that of the Bank of Russia which has proposed imposing a ban on virtual currencies. That said, both the Bank of Russia and the Ministry of Finance seem to agree on one point, that cryptocurrency can never be made legal tender in Russia.

In any case, with the above regulations in place, cryptocurrencies will come to be treated similar to precious-metal accounts in banks and other financial institutions. Also, there are going to be enough safety checks in place to rule out fraud and other such discrepancies. For instance, there is going to be the mandatory know-your-customer and AML checks that the customers will have to comply with along with other regulations.

Siluanov said once the proposed ruling comes into place, it will legalize the around 2 trillion rubles (around $26 billion) already owned by Russians. Apart from this, crypto mining and other foreign cryptocurrency trading platforms too need to be put under a legal blanket that will allow for monitoring of their activities on the one hand while generating an estimated 180 billion rubles or $2.3 billion in taxes.

Russian President Vladimir Putin too is known to have instructed the government and the Bank of Russia to devise a sound cryptocurrency regulation that can make the most of the current as well as the evolving situation in the segment. The Bank of Russia, in its report published in January, called for a complete ban on mining and trading of cryptocurrency while several other government organizations proposed setting up regulations and frameworks under which cryptocurrency trading is allowed in the country.

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