Russia on Thursday announced that it will soon introduce a new legislation to regulate cryptocurrencies. A statement released by the Finance Ministry earlier on the same day emphasised on the need to control the production and distribution of digital currencies without fully banning them.
That’s why the effort is to find a middle ground through a new draft law with a four-point agenda:
- To leave enough breathing room for the domestic crypto economy to survive and grow so investors don’t have to miss out on the potentially rich offerings of the crypto.
- Creating a new revenue channel to support the national budget by taxing investments on cryptocurrencies.
- To prevent cryptocurrency from having an absolute advantage in the country – at least, not to the extent that it comes anywhere close to replacing rouble as the most preferred means of payment.
- To prevent potential misuse of Bitcoin and other digital currencies. (Many world governments are worried over the possible use of crypto coins used for illegal and anti-social activities such as corruption, money laundering, and terror funding etc.)
The proposed draft law, which needs the government’s approval before it can be presented in the parliament, aims at “providing a definition of digital technologies used in the financial sphere,” according to the finance ministry.
The move by the government has come at a time when Russia, like other countries across the world, is witnessing a growing craze in the investor-community for virtual currencies – Bitcoin in particular. Even more worryingly, many Russians are using them to purchase goods and services online.
Russian authorities have long been suspicious of virtual currencies, but now they seem to have sensed that the fast-growing crypto economy is no longer a force that can be left unmonitored.
The finance ministry’s announcement specifically mentions that the new law will be optimized to reduce the risk of fraud in addition to creating “a transparent tax regime for operations with cryptocurrencies, which will lead to an increase in tax revenues.”
However, to develop a framework that aims for the middle ground between an outright crackdown and a free run is difficult to achieve. This is evident from the fact that the finance ministry has already reported a disagreement on the issue with Russia’s central bank that wants the government to push harder against virtual currencies.