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Highlights
- Russia plans to legalize cryptocurrencies for making payments.
- The Russian Central Bank would soon formulate a crypto rule.
- The sanctions may have pushed Russia to rethink its earlier opposing stance.
Russian Industry and Trade Minister said Denic Manturov said that Russia might "sooner or later" legalize cryptocurrencies for making payments in the country.
The Russian minister's statement stands opposite to Central Bank Governor Elvira Nabiullina's previous observation in which she backed a blanket ban on crypto mining and trading. According to the bank, crypto transactions account for US$5 billion in Russia annually.
Russia's finance ministry had earlier sought the bank's opinion in a proposal to allow crypto transactions. At the time, the governor discouraged crypto investments and proposed a ban.
The ministry is reportedly in consultation with the bank to resolve their differences. Manturov said the bank would formulate the crypto rules, and the government would vet them.
"The question is, when this happens, how it will be regulated, now that the central bank and government are actively working on it," the minister said.
Also Read: Global cryptocurrency regulatory body on the anvil, says top official
Many countries are considering issuing their Central Bank Digital Currency (CBDC).
Russia also plans to issue its digital rouble. But initially, the Putin administration opposed the use of non-government cryptocurrencies, citing money laundering and terrorism threats.
In 2020, it gave legal status to cryptocurrencies but banned them for use as a payment mode. The sanctions over the Ukraine invasion may have forced Russia to rethink its previous stance.
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Data Source: coinmarketcap.com
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The crypto market regained some lost ground after last week's drastic fall led by stablecoins. On Thursday, the market was up 1.13% to US$1.27 trillion in the trailing 24 hours to 11:16 am ET.
The top five cryptocurrencies by market cap were also trading in the green. Bitcoin (BTC) was up 2.83% to US$29,924.30, Ethereum (ETH) rose 1.20% to US$1,987.26, and the stablecoin Tether (USDT) gained 0.02% to US$0.999.
Also Read: Why is Numeraire (NMR) crypto gaining attention?
Bottom line:
The Russian minister’s comment comes after Ukraine, on March 16, legalized cryptocurrencies in a bid to help fund the war. People donated millions of dollars in cryptos to support the war.
Russia may also benefit from the legalization of cryptocurrency since it has been cut from the global financial network SWIFT due to the sanctions. The decision may also boost the crypto market, which dropped around 22% since the Russia-Ukraine began on Feb 24.
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