The Bank of Russia and the Russian government have locked horns regarding cryptocurrency adoption in the country.
The Russian government is eager to integrate cryptocurrencies into its financial system, with a draft proposal set for release this week on February 18. Later, the government published an outline of how to regulate the market, allowing domestic trading to emerge from the shadows.
The Bank of Russia, on the other hand, takes a different stance and warns that the use of digital assets may encourage illegal activities.
According to a Bloomberg report, the Russian government is pushing for the legalization of cryptocurrencies in order to attract foreign investment.
Earlier this month, Russian Finance Minister Anton Siluanov stated that legalizing cryptocurrency would help eliminate gray market crypto trading while also allowing the government to supervise the industry.
Deputy Finance Minister Alexey Moiseev stated, “We need to create clear and transparent rules for the participation of citizens and businesses in the financial instruments of the crypto market. Clear regulation excludes the possibility of a parallel financial system appearing.”
Russia’s central bank has made it absolutely clear that the use of cryptocurrency resembles a pyramid scheme.
The Bank of Russia claims that cryptocurrency could be used for illegal monetary operations and thus advises against its use and mining.
“The approaches proposed by the government do not yet allow neutralizing the risks that we see, and at the same time they create new threats. We see significant risks here and I hope good sense prevails, the Bank of Russia Governor Elvira Nabiullina noted.
Just last month Russian President Vladimir Putin expressed support for the government’s proposal to tax and regulate cryptocurrency mining activity. Putin refused to accept the central bank’s proposal to ban crypto mining and ordered both entities to work closely regarding cryptocurrency.