During a speech at the New Horizons marathon, Denis Manturov, Russia’s minister of industry and trade, stated that cryptocurrency will be legalized in Russia at some point in the future, saying it will happen sooner or later.
“I share that view. The key questions are when, how, and by what rules this will be carried out. Everyone recognizes that this is a trend of our times, and it will appear in one form or another,” Manturov commented when asked about legalization.
He added that both the Central Bank and the government are actively looking at the issue and taking a hands-on approach.
In Russia, a clash exists between the Ministry of Finance and the Central Bank regarding the destiny of cryptocurrency. The Bank of Russia argues for a full ban, while the Ministry of Finance pushes for regulated circulation and taxation.
Currently, the country imposes a ban on using cryptocurrency to pay for goods or services, but other forms of crypto activity remain unsettled.
Terrorism and financing of foreign agents. Why does the Central Bank oppose cryptocurrencies?
In January, the Central Bank published a report titled “Cryptocurrencies: Trends, Risks, Measures.” In it, regulators describe cryptocurrencies as “money proxies” and warn they resemble a financial pyramid. The Bank also notes that virtual currencies are increasingly used in illicit activities.
The regulator warned that the spread of cryptocurrencies threatens the financial well-being of citizens, the stability of the financial system, and the misuse of crypto for illegal financing. It proposed banning the issuance, circulation, and exchange of cryptocurrencies on Russian soil. In February, a draft law was prepared to codify this stance, with fines proposed for individuals ranging from 300,000 to 500,000 rubles and for legal entities from 700,000 to 1,000,000 rubles.
“We support the non-use of Russian financial infrastructure in cryptocurrency transactions; implementing this is quite possible,” stated Elvira Nabiullina, the Central Bank governor.
Bloomberg reported in January that the FSB had influenced Nabiullina toward a complete ban, driven by concerns that Russians use crypto to donate to groups deemed undesirable by foreign media interests. [Source attribution: Bloomberg reports on internal discussions and the FSB’s position.]
“Edit, don’t ban.” The Ministry of Finance’s stance
In January 2022, Ivan Chebeskov, director of the ministry’s financial policy department, argued for allowing cryptocurrency to flourish rather than forbidding it. He contended that banning high-tech innovation while permitting it elsewhere would be counterproductive.
“The goal is not to ban, but to regulate. Regulation brings transparency to protect citizens,” Chebeskov explained.
That January, the Ministry of Finance presented a concept to regulate crypto without a ban. The ministry warned that a complete absence of regulation, or an outright ban, could destabilize the industry, fuel a larger informal economy, and increase fraud. It argued that law enforcement would be hampered without a framework to address crypto-enabled crimes. The ministry suggested a practical approach: legalize mining, impose taxes, create a dedicated body to oversee crypto exchanges, and introduce screening for online crypto purchases. If enacted, these ideas could allow cryptocurrency to function as an investment vehicle, with banks facilitating income generation, while payments for goods and services would still be prohibited.
The government has signaled support for the Ministry of Finance’s regulation concept. A joint draft law was to be prepared with the Central Bank, and President Vladimir Putin asked the ministry and the central bank to reach a consensus. Prime Minister Mikhail Mishustin stated that cryptocurrency cannot be treated as money and should not be recognized as a payment instrument. Yet he acknowledged that mining development might be explored due to its potential to spur data centers and related infrastructure. [Attribution: official statements from government sources and media coverage summarized for context.]
In summary, the administration has framed a path that keeps a strict stance on payments while exploring regulated, taxed mining and institutional oversight as components of a broader framework for the crypto industry in Russia.