Russia may ban the issuance and circulation of cryptocurrencies

Text | Liang Yushan

On March 17, according to Cointelegraph, Alexey Guznov, head of the legal department of the Russian Central Bank, revealed in an interview that the country’s digital financial assets bill, which has not yet been formally implemented, will prohibit the issuance and circulation of cryptocurrencies and will impose fines for violations of the law.

Alexey Guznov also pointed out that although the "Digital Financial Assets Act" initially allowed cryptocurrency trading, the revised document will apparently prohibit all activities except holding the asset. Alexey Guznov did not give a direct answer to whether the country's central bank prohibits citizens from exchanging cryptocurrencies for the country's legal currency ruble or foreign currency.

On the contrary, Alexey Guznov reiterated that “the central bank is against the issuance of cryptocurrencies by institutions”. He also added that the central bank will not be able to impose certain restrictions on Bitcoin transactions. “For example, if people complete transactions in jurisdictions that do not prohibit Bitcoin transactions, it will be unlikely for us to regulate them.”

It is understood that the above-mentioned upcoming bill was first proposed by Russian President Putin in January 2018. He has twice ordered the passage of the bill "On Digital Financial Assets", but the bill has not yet been finalized.

While Russia’s Ministry of Finance has been working to legalize cryptocurrencies, the country’s central bank has been opposed to the move. In February, the central bank issued a set of rules on suspicious transactions and classified any cryptocurrency-related transactions as potential money laundering risks.

At the end of December last year, Elvira Nabiullina, governor of the Central Bank of Russia, said that while prohibiting local entities from issuing their own digital assets, the institution is exploring the potential uses of stablecoins through regulatory sandboxes and continues to explore the possibility of issuing central bank digital currencies.