Key Highlights
- Russia bans crypto payments, allowing only rubles as legal tender, highlighting tension between government regulation and central bank opposition.
- This comes as global caution over crypto grows as China warns stablecoins aren’t legal money, emphasizing crypto’s role as investment, not everyday currency.
Russia has banned cryptocurrency payments requiring all domestic transactions to use rubles. Anatoly Aksakov, Chair of the State Duma’s Committee on Financial Markets, told TASS that Bitcoin and Ethereum will never be legal tender in the country.
“Cryptocurrencies will never become money within our country. They can only be used as an investment instrument. If payment is required, it will only be in rubles,” he said. This announcement reflects the increasing rift between the central bank, which is opposed to the use of cryptos, and the government, which is getting to terms with regulation.
This comes against the backdrop of increasing adoption of digital currencies in Russia, including in international trade. Aksakov emphasized that Russian companies have engaged in billions of dollars’ worth of transactions using cryptocurrencies even with the regulations in place.
In addition, there are reports that some of the major banks have observed rising demand from consumers with respect to crypto products. On the other hand, the country’s central bank has repeatedly warned against using crypto, with long-serving Governor Elvira Nabiullina calling for a ban that includes all crypto transactions, exchanges, and mining activities, including the mining of Bitcoins.
Regulatory tug-of-war intensifies
Since 2020, Russia has banned the use of cryptocurrencies for payments, causing a long fight between the Ministry of Finance and the central bank. The ministry wants to regulate crypto exchanges and tax profits, while the central bank is pushing for a full ban similar to China. Because of this disagreement, bills have stalled for years, leaving the rules unclear.
Recently, however, the Ministry of Finance appears to be gaining ground. Russia’s President Vladimir Putin has acknowledged the growth of Russian crypto mining. Evgeny Masharov, a member of the Civic Chamber’s Commission for Public Review of Bills, also echoed the ministry’s stance, emphasizing urgent regulation.
“If [cryptocurrencies] were legalised, federal budget revenues would see a significant increase,” Masharov told OCN. He added that proper regulation would help law enforcement prevent money laundering and fraud, particularly from voice phishing attacks.
Global caution and U.S. crypto limits
This act is in line with cautiousness in global developments. Towards the end of November, a statement by China’s central bank indicated that stablecoins are not money and cannot be used to replace cash. The People’s Bank of China also hosted a high-level discussion forum on speculation involving virtual currencies.
The need for stablecoins is also emphasized as stablecoins do not comply with the requirements under the laws regarding the identification of users, as well as money laundering. Therefore, it is clear, as the need is stated by both countries, that cryptocurrencies are supposed to be investment products and not currency.
On a different front, Pennsylvania state lawmakers restricted the role of cryptos for public office-holders in August of this year. HB1812 legislation forces leaders and their relatives to dispose of digital currencies such as Bitcoin, NFTs, and meme coins within the first 90 days of taking office. This includes one year after office for any policy alterations that may affect personal crypto assets.
Also Read: BNB Chain Teases ‘U’ Stablecoin for Large-Scale Institutional Use
