Russia to regulate cryptocurrencies and classify them as an “analogue of currencies”

As per the official announcement this Tuesday, Russia’s government and central bank have struck an agreement on how to regulate crypto.

The government and central bank of Russia are now working on a proposed bill that will classify cryptocurrency as an “analogue of currencies” rather than digital financial assets, which will go public on February 18.

It is also proposed that only full identification through the banking system or regulated intermediaries would allow cryptocurrencies to function in the legal industry.

The country also intends to make it an “obligation” for market players to warn and educate Russian residents about the risks of digital assets. According to a report by Kommersant, crypto transactions valued at more than 600,000 rubles (about $8,000) must be declared, or else, they will be considered under criminal offense.

A major shift in regulatory plans

The deal represents a major U-turn after the Bank of Russia suggested a nationwide ban on crypto miners and other crypto activities last month, citing concerns that they may endanger the country’s financial system. Several Russian authorities and parliamentarians were involved in the decision-making process on this new strategy, including the Ministry of Finance, the Federal Security Service, the Ministry of Internal Affairs, the Federal Tax Service, and others.

Russia faced major backlash from various political executives over the crypto ban decision amid the confusion of banning or legalizing crypto. Ivan Chebeskov, a ministry official, stated a few days following the central bank’s proposal for a ban that the government should regulate crypto rather than outright ban it. He cautioned that a blanket ban would put Russia behind the times in terms of technology.

This news comes after months of conjecture about how Russia will deal with digital currencies. While it is unknown what the recent move will entail for Russian businesses and citizens, it appears that the nation is gradually warming up to the blockchain technology and cryptocurrencies.