Russian government and central bank agree to treat Bitcoin as currency

According to Tuesday’s announcement, the Russian government and central bank have reached an agreement regarding how to regulate cryptocurrency.

Russia’s central bank and government are currently working on a draft law to define crypto as an “analogue currency” instead of digital financial assets. It is expected to be released on February 18. Only cryptocurrencies that are fully identified through the banking system and licensed intermediaries will be able to function in the legal sector.

Kommersant stated that Bitcoin (BTC), transactions and possession in Russia of cryptocurrency are allowed. However, these transactions must be made through a “digital currencies exchange organizer” (a bank or peer-to-peer licensee).

It is also noted that cryptocurrency transactions exceeding 600,000 rubles (roughly $8,000), must be reported; otherwise it could be considered criminal. Anyone who accepts cryptocurrencies illegally as payment will be subject to fines.

After months of speculation over how Russia will deal with digital currencies, this news is finally official. Although it’s not clear what this decision will mean to Russian citizens and businesses, it appears that Russia is slowly embracing the idea of cryptocurrency.

Related: Russian central banks registers country’s first digital asset manager

The Bank of Russia demanded a nationwide ban on crypto in January. This was in response to a report by the bank that warned of the risky nature of the industry. As part of its proposal to ban digital assets, the bank stated that financial institutions should not allow crypto transactions.

The Russian Ministry of Finance opposed the proposal. Ivan Chebeskov from the ministry, who made the request for a ban, stated that the government should regulate cryptocurrency rather than banning it completely. He warned that Russia could fall behind technologically if it bans crypto completely.

There are also reports that President Vladimir Putin supports regulation of the crypto mining sector in Russia.