According to news reports from local Russian media, Russian authorities have resolved not to issue a total ban on cryptocurrencies but rather develop a roadmap to regulate this fast-rising industry. The reports further disclosed that the regulations would be strict, but it is still better than a total shutdown of the nascent crypto space.
The Group’s Proposal
Russian president, Vladimir Putin, tasked a group comprising ministers from various industries responsible for developing the new regulation. As stated in the roadmap, part of the group’s proposal reveals that only Russian financial institutions are legally permitted to conduct crypto transactions. Other crypto platforms would need an operating license issued by Russia’s finance ministry before Russians can run business with them.
There are indications that Binance is already taking giant steps to be the first legally registered foreign crypto platform. Whether local or international, all the crypto platforms are mandated to have a KYC and AML policy in place, which they must follow strictly.
The group proposes the creation of a monitoring group that will ensure that these platforms are truly adhering to these policies. They would also mete out appropriate fines to any platform that runs foul of these policies.
Implementing The Proposal
The road map revealed that the finance ministry is working on modalities to ensure that these platforms do flout their KYC and AML policies. The plan is for the finance ministry to launch the modalities before June 2022. Then before the year ends, it would have upgraded these modalities to conform with FATF standards and release the process of registering crypto platforms, including how they should submit their reports to the ministry.
Furthermore, the group proposed that crypto companies and crypto holders in Russia need to start providing crypto reports containing the holdings and transactions they’ve performed on their crypto accounts, similar to how they report their taxes.
While the group proposed punishment for offenders, it didn’t specify how they would be punished. Another proposal from the group was for the authorities to clarify ways of determining the prices of these digital assets.
Highlights From The Proposal
The group suggests that the authorities employ the services of Aximetria and Rosmofinmonitoring, who would be responsible for monitoring compliance and crypto trades, respectively. The local Russian news outlet, RBK, claimed that the country’s deputy prime minister has agreed to the proposal, but the apex bank remains opposed to the idea.
Hence, the authorities have tasked the apex bank with the responsibility of learning from china the way to ban digital assets completely. Unsurprisingly, Russia’s apex bank (CBR) is opposed to the group’s proposal. That has been its position from day one and has often cited environmental issues, huge energy consumption, and financial instability as reasons why the government must blanket ban the crypto industry.
The bank cited Kazakhstan as an example of a nation suffering from constant power outages because it allowed crypto mining in its domain. However, the president countered the vast energy consumption issue when he stated that Russia’s energy supply is more than enough to provide as much energy that would suffice crypto miners.