Russia Makes Crypto Exchange Ban U-Turn

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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July 27, 2024

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The Russian government is reportedly set to make a crypto exchange ban u-turn, and will no longer try to stop the “circulation” of crypto in the country.

The claims came from the lawmaker Anton Gorelkin, the Deputy Chairman of the State Duma’s Committee on Information Policy.

Crypto Exchange Ban ‘Concerns’ Too ‘Serious’ to Ignore?

In a Telegram post, Gorelkin, one of the co-authors of a draft law on crypto mining, said that many lawmakers were “seriously concerned” about plans to shut down domestic crypto exchanges.

Ministries and the Central Bank have been at loggerheads on crypto mining and crypto exchange-related policy for years.

🚨 Russia’s Crypto Mining ‘Legalization’ Bills Could Be Approved ‘This Week’

Russia may legalize industrial crypto mining by the end of the week, media outlets in the nation have claimed.#CryptoNews #Russiahttps://t.co/RwCqoZzf8R

— Cryptonews.com (@cryptonews) July 24, 2024

This has led to a lengthy impasse. And this means that the nation’s thriving crypto mining industry and burgeoning crypto sectors remain almost entirely unregulated.

Earlier this month, President Vladimir Putin called on lawmakers to end the impasse and fast-track crypto mining legislation.

Lawmakers have responded by saying they will pass two crypto-related bills before the end of the current parliamentary session on August 5.

The Central Bank wants to create a crypto exchange ban. It wants to exclude a small group of trading platforms that it wants to operate in a special sandbox for sanctions-evading, cross-border trade payments.

But Gorelkin suggested that lawmakers think this proposal is unworkable. He explained that the Committee on the Financial Markets had “managed to delete the clause banning the organization of cryptocurrency circulation.” The lawmaker said:

“In its current form, the clause was causing some quite serious concerns among industry representatives.”

Russia’s central bank raises interest rates for the first time this year https://t.co/bKL4Umiug8

— Bloomberg Markets (@markets) July 26, 2024

Russia to Ban Crypto Ads

Gorelkin added that lawmakers will, however, uphold a proposed ban on the advertisement of crypto-related products and services in Russia.

There was mixed news for home-based crypto miners. The State Duma’s Energy Committee is reportedly set to turn its back on a proposal to cap the amount of electricity it lets private individuals use to power their rigs.

Gorelkin said that proposals to “completely ban” individuals from mining crypto “did not pass” the committee stage.

The lawmaker suggested that the Duma is now almost certain to pass a law allowing companies to use crypto as a settlement tool in international trade.

The Central Bank wants to force companies to use a government-approved sandbox for all such deals.

However, Gorelkin suggested that politicians would not be forthcoming with further details about the sandbox. He said:

“I regularly receive inquiries from journalists who are interested in how businesses will use [crypto] to [trade] with [overseas firms]. I agree with my colleagues who believe that there is no need to publicize details about this. It could play into the hands of our opponents. There is a saying that ‘money loves silence.’ This applies completely to the use of crypto in cross-border transactions.”

Putin is bucking Western efforts to isolate him internationally, meeting with more than 20 world leaders just since May. Russian businesses aren’t so lucky. https://t.co/Yvxsu49EDb

— Bloomberg (@business) July 25, 2024

Race Against Time?

Both the mining bill and a separate bill on the launch of the sandbox have passed their first readings in the Duma.

Lawmakers face a race against time if they want to meet their deadline, with both bills requiring a second a third reading – in addition to two more committee discussions.

The Financial Markets Committee, however, says that the sandbox bill is now ready for a second vote.

Plus World reported that lawmakers have included a clause that will create a regulator for “settlements made in digital currencies.”

The media outlet reported that lawmakers are now set to vote on the bill on July 30.

Earlier, Putin said that crypto mining accounts for 1.5% of Russia’s combined energy usage. He also suggested that many of the nation’s regions should be given the power to issue local bans on crypto mining.