The Russian Ministry of Finance is said to be lobbying the government to make it more tolerant of cryptocurrencies.
While the Central Bank of Russia wants to ban cryptocurrencies, the Ministry of Finance wants to legalize them. The government is said to be leaning towards the latter.
The Russian Finance Ministry will allegedly allow banks to sell them as investment vehicles. The agency strongly opposes the anti-cryptocurrency stance of Russian banks and is lobbying the government to legalize cryptocurrencies and allow banks to trade with them, according to Russian newspaper Kommersant.
The newspaper cites a letter from Russian Finance Minister Anton Siluanov to Prime Minister Mikhail Mishuskin. In the letter, Siluanov outlines the differences between the two institutions and outlines his arguments in favor of legalizing cryptocurrencies as a financial instrument.
Both the Central Bank of Russia and the Ministry of Finance agree that cryptocurrencies should not be allowed as legal tender, but they disagree on whether they should be legalized as a means or banned altogether.
On January 20, the National Bank of Russia released a 37-page report calling for a complete ban on the use and mining of cryptocurrencies in Russia, citing financial stability, monetary sovereignty and environmental concerns.
According to the U.S. Treasury Department, Russians own about $26 billion worth of cryptocurrency, which represents just a few percent of the population's total savings (the government estimates the figure at nearly $214 billion, Bloomberg reported Tuesday). These funds should be legalized and brought out of the "gray" areas according to regulators.
To this end, the Ministry of Finance has proposed new regulations that will grant certain banks a general license to trade in cryptocurrencies in a strictly controlled environment. In addition, all professional market participants will need to be licensed, market participants will be identified under "Know Your Customer – KYC" and anti-money laundering policies, cryptocurrencies will be taxed, and dishonest market participants will be prosecuted.
The Russian government supports the Finance Ministry's position and is moving toward regulation rather than a total ban on basements, Kommersant reports. Last week, news broke that President Vladimir Putin, who opposes the Bank of Russia's proposal, also favors regulation of the asset class.