The Back and Forth Of Russia’s Dance With Cryptocurrency

Russian authorities may grant legal status to cryptocurrencies by 2018. According to Russia’s Deputy Finance Minister Alexey Moiseev, closer monitoring of cryptocurrencies could prove to be helpful in the fight against money laundering. As a result, over the next year, the Russian central bank will work alongside the government to develop rules against illegal transfers.

“The state needs to know who at every moment of time stands on both sides of the financial chain,” Moiseev said. “If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.”

This announcement is a complete 180-degree turn from Russia’s previous stance on cryptocurrencies. In 2014, the Russian Ministry of Finance presented legislation that would ban the use of all cryptocurrencies. However, the bill was later rejected by the Russian Economic Development Ministry, which argued that the proposed ban would “create legal barriers” for various businesses and economic entities in Russia.

In April 2016, the Finance Ministry in Moscow proposed another law that called for a fine of up to 2.5 million rubles ($38,000) for digital currency use in Russia. Months later, Moiseev came forward to propose a revision to the bill that allowed for cryptocurrencies to be used for outside purchasing and sales abroad. When asked in an interview why the ministry had allowed the amendment to their cryptocurrency purge, Moiseev stated that it didn’t want to hinder the development of blockchain technology.

Russian authorities have not confirmed when they will decide the ultimate fate of cryptocurrencies within the country, but Russian Deputy Governor Olga Skorobogatova revealed in February that a decision would be made by mid-2017 whether digital currencies will be considered assets, cash, or securities.

ETHNews will update this story as more information develops.