Cryptocurrencies are still a nascent technology which the Russian constitution doesn’t recognize as a means of payment. Therefore, there is no need to make regulations to govern the industry. This is according to Alexander Kolanov, the Minister of Justice for Russia.
Kolanov was answering a question posed about the government’s stance on cryptos in the Federation Council. According to him, cryptos haven’t infiltrated the Russian financial industry enough to warrant legislation. The current regulatory framework for the digital payment systems covers the crypto field sufficiently.
The regulatory framework in the country has continued to take a wait-and-see approach regarding cryptos. The government has warned its citizens against the risks posed by cryptos. However, it has not banned cryptos outright. On the contrary, the Russian leadership has been reported to be friendly towards cryptos. A report last year claimed that the Russian government had been instrumental in the development of Venezuela’s Petro crypto.
Kolanov explained why the government is yet to regulate the industry stating “Neither the Constitution nor the current legislation on the financial system categorically allows the use of cryptocurrency as a means of payment.” In legislative terms, cryptos should be categorized as “other property,” he explained.
The Russian government has gone full-circle with crypto regulations. In early 2018, the government announced that it would regulate cryptos and not ban them as earlier proposed. A bill that defined cryptocurrencies as digital rights was put forward in May. However, it received widespread opposition from many stakeholders.
The Russian government was also reported to be interested in buying cryptos to circumvent U.S sanctions. A government official later came out to refute the claims. However, there have been indications that the Vladimir Putin’s government could explore the use of cryptos as U.S sanctions continue to take effect.
While Kolanov believes there is no need to regulate cryptos, there are lawmakers who share a very different view. One of them is Valentina Matvienko, the chairperson of Russia’s upper house. Matvienko recently stated that she believes the country is moving too slowly toward crypto regulation. She reached out to the ministries involved seeking an explanation on why there has been no progress with the proposed crypto regulation bills.
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