Russia Plans to Legalize Cryptocurrency as a Form of Payment

Cryptocurrencies were once again allowed in Russia after a long hiatus, but they cannot be used to purchase goods or services. The country’s new cryptocurrency law imposing strict constraints on how people may use these digital currencies as cash has been met with much criticism from traders who say it will effectively stop them cold when trying to make transactions for things like oil futures contracts at precisely the time you need those funds most.

In less than two years, the Moscow government will be integrating cryptocurrencies into its financial system.

On Thursday, Russia’s Minister of Industry and Trade Denis Manturov announced that they will “sooner or later” recognize cryptocurrencies as a form of payment. It is assumed this means the government has reached an agreement with their central bank about how these digital currencies should be treated in order for them to become legal tender by law.

Russia’s plan to create a central bank digital currency has been met with skepticism. While they previously discouraged the use of private cryptocurrencies, it seems that Moscow may be making some progress on this front.

Russia’s Elvira Nabiullina recently stated that the bank cannot tolerate cryptocurrency investments, which account for around $5 billion in yearly Russian transactions, and has suggested blocking their trading as well as mining to counter this trend.

Russia is reported to be getting closer to an agreement on the matter, with both sides reportedly preparing legislation that would allow certain financial transactions. However, before this could happen it’s necessary for Russia’s parliamentarians to first introduce compatible laws which have been recommended by their ministry of Finance.

In a recent interview, Manturov was questioned about his thoughts on cryptocurrencies and how they might become legal tender. “The question is whether or not this will be regulated when it occurs,” he said.

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Russian officials have said that they expect the country’s cryptocurrency exchanges to be supervised by their central bank in some form.

This evidence shows that Russians are more pragmatic about cryptocurrencies, and their acceptability in the country. Instead of a near-total freeze on cryptocurrency activity like many had predicted before it happened.

The Russian government has finally come around to supporting cryptocurrency use after years of claiming they could be used for criminal activity or terrorism financing.