Russian Parliament working group: There should be ‘mechanisms to control crypto transactions’

Russian Parliament working group: There should be 'mechanisms to control crypto transactions'

A working group of the State Duma (the lower chamber of the Parliament) has expressed their support for digital asset regulation rather than banishment, amid ongoing discussions between the Central Bank of Russia and the nation’s Finance Ministry about the future of crypto.

As a way to reduce the risk associated with crypto’s adoption, the working group recommended that the industry be “clearly regulated”

Local media reported that around 50 experts participated in the panel session organized by the Duma’s working group “On questions regarding the regulation of cryptocurrency.” Participants came to the conclusion, “effective and transparent” regulation in Russia of the digital asset market is required. They also need mechanisms “to monitor cryptocurrency transactions.” Experts mentioned that such mechanisms are already in place in other countries. However, it is not known if they exist in any other jurisdictions.

The main takeaway from the session was the apparent support by the group for the Finance Ministry’s approach towards regulation with some technical reservations. Experts advised the Ministry to amend the language in its bill regarding non-institutional miners, traditional banks’ roles, know your customer (KYC), and illicit crypto uses.

If it follows its own advice, the lower chamber would support the Finance Ministry’s position in the heated debate with CBR. This promotes a restricted approach to crypto.

In 2022, this battle reached a decisive stage. The CBR proposed a ban on mining in the country and the circulation private digital currencies. Quickly, the Finance Ministry presented its “Framework to regulate the mechanisms of digital currency circulation” which defined digital assets in many ways as similar to fiat currencies.

Both bodies presented their contradictory bills on February 18. While the CBR doubled down its intentions to ban crypto issuance and circulation, the Ministry proposed to establish legal requirements for exchange platforms that allow them to operate under special registration procedures.

The Central Bank’s position regarding the crypto dispute is becoming more uncertain as there are early signs of support from parliament and Dmitriy Chernyshenko’s new regulatory roadmap. The proposal of a blanket ban by the regulator is incredibly lacking in institutional allies from both the legislative and executive branches of government.

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