Russian finance ministry presents draft bill on crypto regulations

The Russian finance ministry has been pushing forward with its plans to advocate for regulation in the cryptocurrency sector despite the opposition from the bank of Russia that wants to ban the sector.

The Russian finance ministry has presented draft legislation addressing the regulation of the digital asset sector. The legislation talks about more protection for investors.

Legislation on cryptocurrencies

The Russian finance ministry has tabled a bill that says cryptocurrencies cannot be used as a payment method in Russia. However, the assets will be deemed legal investment instruments.

If this bill is approved, it will require customers to provide identification to transact in these assets. The bill also asks lawmakers to require foreign crypto exchanges to seek a license before operating in the country. These firms should also educate their customers before offering services to them.

If a resident passes a financial literacy test conducted by the financial firms, they will receive an allocation of up to 600,000 rubles, equivalent to around $7806 annually. Those who fail this test will allocate up to 50,000 rubles, equivalent to around $650 annually.

The finance ministry has also advocated for cryptocurrency mining. This is also an area that the president of the Russian Federation, Vladimir Putin, has addressed. Russia is currently the third-largest Bitcoin miner, accounting for around 11.2% of the global hash rate.

Allowing local banks to deal in crypto

The Minister of Finance in Russia, Anton Siluanov, has proposed the approval of local banks to transact in cryptocurrencies. Siluanov, who has been at the forefront of advocating for crypto adoption in Russia, has said that cryptocurrencies should be treated similarly to precious metals such as gold.

The debate over whether Bitcoin (BTC/USD) is better than gold has been raised severally in the crypto community. The two have some similarities, such as their supply being capped. Bitcoin is a scarce metal, and its maximum supply sits at around 21 million coins. The two have become popular stores of value, with Bitcoin even gaining the term digital gold due to its increased use to hedge against inflation.

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