Traditionally, we'll start with an explanation. The situation with cryptocurrency regulation in Russia remains unclear. On the one hand, there is the Central Bank, which opposes digital assets and wants to protect ordinary citizens from them, because crypto is notorious for collapsing. At the same time, the Russian Finance Ministry believes that the niche needs to be regulated - and that is the right approach for the new industry.


As a result, the country’s president intervened. Vladimir Putin asked both sides to come to a consensus and prepare a framework for niche regulation. At the same time, he mentioned that Russia has a competitive advantage over other countries in terms of cryptocurrency mining. Read more about the president’s remarks in a separate piece.

Russian President Vladimir Putin

So far, the situation has not ended, but representatives of the Ministry of Finance do not see the possibility of banning cryptocurrencies.

What will happen to cryptocurrencies in Russia?

Anton Siluanov announced his point of view during a briefing with the Central Bank, Cointelegraph journalists note. Overall, the finance minister believes that introducing proper regulation of the cryptocurrency industry as soon as possible could bring a much better result for the country and citizens in general than a complete ban on crypto. It would allow the government to finally control the market and increase the country’s budget through taxes from mining.

Here is the minister’s rejoinder in which he shared his attitude towards the situation of the digital asset industry.

The Central Bank wants to ban crypto-assets, cryptocurrency, on the grounds that it creates risks, primarily for citizens, could “infect” financial institutions, banks and create a non-transparent settlement market. This is the same as banning the internet, which is impossible.


Indeed, digital assets are decentralised, which means it is impossible to ban Bitcoin's blockchain. The only way to do that would be to bypass every holder of a node - that is, the special software that checks the state of the cryptocurrency network - and physically destroy the devices on which it is running.

Authorities can influence the circulation of cryptocurrencies through centralised exchanges, as Canadian officials did the day before. However, it is indeed impossible to influence the conventional network outside of centralised services.


Russian Finance Minister Anton Siluanov

Siluanov added that the Ministry of Finance recognizes the concerns of the Central Bank and therefore believes it necessary to limit the access of non-professional investors to cryptocurrencies as part of its concept of industry regulation, published in early February. Thus, the maximum investment amount for ordinary investors could be set between 50,000 and 100,000 rubles, the minister said.


Exactly how this restriction will be controlled is unclear. However, cryptocurrency exchanges clearly will not introduce limits for the acquisition of coins. Therefore, there is a possibility that it is about the amount of remittances to the trading platforms.


Russian crypto investor waiting for a miracle

Officials did not specify whether the potential limit would refer to monthly investments or a longer period of time. Meanwhile, the Bank of Russia does not support the idea of allowing non-professional investors to buy cryptocurrencies at all, citing general risks like fraud and money laundering.

In addition, authorities are particularly worried about so-called volatility, which is the sudden changes in the value of digital assets. And while traders tend to make a lot of money on it, officials want to protect ordinary citizens from volatility. In their view, people should not get involved with something whose price changes so actively. And it’s funny, because this way the authorities are essentially saying what citizens should and shouldn’t do.

Russia and digital currencies.


We believe that this viewpoint is indeed true. Obviously, the authorities will not be able to prohibit citizens from interacting with digital assets, so it is better to regulate them. That said, the prospect of proper regulation of coins is hard to believe at the moment - especially as it hasn't been done in many years. However, things could change in the near future, given the president's recommendations.


What do you think about it? Share your opinion in our millionaire cryptochat. There we will talk about other topics related to the blockchain and decentralisation industry.