Russian Prime Minister Mikhail Mishustin on Tuesday officially instructed the government to come to a consensus regarding crypto regulation in Russia by Dec. 19, 2022.
The prime minister specifically called on the Duma and other state authorities to come up with coordinated policies on regulating the issuance and circulation of digital currencies in Russia. Mishustin also asked regulators to finalize regulations for cryptocurrency mining and cross-border transactions in digital currencies.
The official stressed that the upcoming draft crypto regulations should be aligned with the Russian Finance Ministry, the central bank, Anti-Money Laundering authority Rosfin monitoring, the Federal Tax Service and the Federal Security Service.
The latest news brings yet another official confirmation that Russia has been growing increasingly serious about the possibility of cryptocurrencies for cross-border transactions.
Last week, Deputy finance minister Alexei Moiseev reported that the Bank of Russia has agreed with the finance ministry to legalize crypto for cross-border payments. Despite its willingness to authorize cross-border transactions, the Russian central bank still opposed the legalization of local crypto exchanges as well as legalizing cryptocurrency as a means of payment.
The feasibility of banning domestic crypto exchanges while allowing cross-border payments apparently raises a lot of questions, especially given that Russia is yet to come up with a framework to provide such laws.
Russia might be the first country in the world to authorize cross-border crypto payments while banning local crypto payments, according to Maria Agranovskaya, a legal attorney and fintech expert in the Russian State Duma. “This isn’t a common approach, to my knowledge,” she said.
The question of how exactly Russia plans to differentiate between domestic and cross-border crypto payments is yet to be answered, Agranovskaya noted. “This distinction is not yet in existence. All ‘foreign’ crypto is regarded as digital currency and that’s it for now,” she said, adding:
“It is absolutely unclear at the moment. I presume the matter shall be in line with the currency control regulations — tax residents in the local territory would not be allowed to use crypto for payments internally.”
Russia has emerged as one of the most uncertain jurisdictions to crypto, despite adopting its major crypto-related law, “On Digital Financial Assets,” in 2020. The law prohibited Russians from using cryptocurrency as payment but didn’t ban activities like crypto trading and mining in the country. Russian financial regulators have not approved any local crypto trading platform, only allowing crypto trades through foreign crypto exchanges like Binance.