The draft legislation of the Russian Ministry of Finance aims to create a legal market for digital currencies.
Moscow: Russia’s finance ministry said on Monday it would consider proposals on cryptocurrencies from the country’s central bank as long as they do not contradict its own approach, paving the way for legislation related to digital assets.
A simmering dispute over cryptocurrency regulation in Russia flared up Friday when the Treasury Department submitted legislative proposals to the government that contradicted the central bank’s demand for a blanket ban.
The Bank of Russia has proposed banning cryptocurrency trading and mining due to the threat digital currencies pose to financial stability. But the Treasury Department prefers legislation that regulates cryptocurrencies, allowing them to be used as an investment vehicle, but not as a means of payment.
The Treasury Department’s draft legislation aims to create a legal market for digital currencies, it said Monday.
One proposal is for transactions related to the purchase or sale of cryptocurrency that require customer identification, a move that could reduce one of the key selling points of cryptocurrencies – their anonymity.
Other proposals include foreign cryptocurrency exchanges required to obtain a license in Russia, and introducing financial literacy tests that determine how much individuals are allowed to invest.
Citizens who pass the tests will be allowed to invest up to 600,000 rubles ($7,853) in digital currencies each year, according to the Treasury Department. Those who fail are given an investment limit of 50,000 rubles per year.
The central bank is also against cryptocurrency mining, where powerful computers compete with others connected to a global network to solve complex mathematical puzzles. The bank warned about inefficient energy consumption and the environmental impact of mining, while the Treasury Department prefers to allow mining on a tax basis.
The central bank did not immediately respond to a request for comment.
