Russia officials fail to reach a compromise over crypto regulation

• Discussions held on Tuesday between the Russian Finance Ministry and Central Bank officials on crypto regulation bore no fruit
• President Putin has urged deliberations between the central bank and the government to reach a common ground

Russia President Vladimir Putin recently chipped on the cryptocurrency conversation – a matter that has brought forth divided opinion in the country. While one facet has strongly pushed for a blanket ban on these digital assets, the other has appeared to lean towards regulating them. Putin urged both sides of the aisle to have a sit-down to reach a resolution.

Bloomberg reported that senior government personnel held a meeting regarding the matter on Tuesday, citing individuals who requested not to be identified as the meeting had not been disclosed to the public. However, the officials failed to agree on the way forward for crypto regulation.

The news outlet said that the Head of the Central Bank of Russia, Elvira Nabiullina, Deputy Prime Minister Dmitry Grigorenko and Minister of Finance Anton Siluanov (reportedly the government officials in question) then resolved to conclude the meeting with their disagreements formalised.

President Putin’s directive to reach a resolution soon was last week reflected by Russian newspaper Kommersant, which established that the government and the central bank are to present a bill draft on regulation of crypto by Friday, 18th February.

Russia’s Central Bank is unrelenting in its anti-crypto stance

The central bank will require some convincing as its anti-crypto stance seems quite the established one. Communication from the bank’s governor to the finance minister has always insisted on outlawing crypto assets. The argument is that crypto-assets are more like a pyramid scheme and threaten the nation’s financial stability.

“We will spare no effort to convince the government and go into more detail about our arguments because we see significant risks. I’m counting on common sense here,” Elvira Nabiullina said in a press conference last Friday.

Notwithstanding the anti-Bitcoin stance, The Bank of Russia confirmed on Tuesday that it had launched trials for the digital ruble, the bank’s proposed digital currency. The bank’s launch falls in line with plans to enable digital ruble transactions during early 2022.

The Finance Ministry is in favour of proceeding with caution

Contrastingly, the government is leaning more towards accepting the use and trading of cryptocurrencies but suggesting that they should be under strict government control.

 The Ministry of Finance proposes that banks offer exchange services and licenses which could be used to regulate other entities involved in crypto. Worth noting, President Putin has previously spoken to Russia’s competitive advantage – referring to the surplus power supply – as to why Russia should be more well-disposed to these digital assets.