Russia’s central bank to prohibit miners from selling digital assets to Russians

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The Bank of Russia has announced that it is mulling over the decision to ban block reward miners from selling their mined digital assets, reports Interfax.

The central bank made it clear that it supported the legalization of block reward mining. However, the bank adopted a negative stance towards selling virtual currencies to Russian citizens under the draft law for mining regulation.

“The Bank of Russia conceptually supports the bill. It provides for restrictions on transactions with cryptocurrencies obtained as a result of mining. At the same time, we believe that cryptocurrencies obtained as a result of mining can be sold exclusively using foreign information infrastructure and only to non-residents,” a source at the central bank said.

The bank makes an alternative provision for miners looking to sell their assets to Russians, noting that it will be through a specially constructed platform that will form part of an experimental legal regime. Under this provision, details of all transactions should be forwarded to the Federal Tax Service.

“In general, we adhere to the position that the circulation of digital currency on the territory of the Russian Federation is inadmissible,” the bank remarked.

It is important to note that the Ministry of Finance does not support the central bank’s plan concerning the sale of mined assets on the grounds that mining not done within the experimental legal regime is banned.

At the moment, it is unclear how Russian miners intend to sell their assets in the face of widespread sanctions against the country for its invasion of Ukraine. Digital asset firms have been ordered to report Russian activities on their platforms to counter attempts from sanctioned entities using virtual currencies to evade sanctions.

Conflicting tales of the use of digital assets in Russia

Russia’s Ministry of Finance found it imperative for the country to turn to digital assets to facilitate cross-border transactions in the face of tightening sanctions. Deputy Finance Minister Alexey Moiseev revealed that the central bank agreed with the plan for citizens to use digital assets in international transactions.

Moiseev revealed that the legislature would have to pass a watertight legal framework to prevent the misuse by actors. The Deputy Minister also stated that businesses would be in the best place to decide the type of virtual currencies, counterparty negotiations, and the applicable countries.

Despite the lofty ambitions, there is conflict over the existing ban on virtual currencies in local payments within Russia. Pundits have argued that law enforcement agencies could face a herculean task in enforcing the distinction between both classes of transactions.

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