Since January 1 last year, cryptocurrencies have been legal in Russia, but cannot be used to purchase goods or services.
Russia recently passed a new cryptocurrency law that, while falling short of the previous ban on cryptocurrencies, still maintains strict restrictions on the use of cryptocurrencies as a form of currency.
16 months from now, Moscow is taking a different approach and will add cryptocurrency to its financial infrastructure.
'Sooner or later'
Industry and Trade Minister Denis Manturov said on Thursday that Russia will "sooner or later" legalize cryptocurrencies as a form of payment, indicating that the government and central bank may be nearing a solution.
Moscow has announced plans to create a central bank digital currency, but has until recently discouraged the use of private cryptocurrencies.
There may be some progress made by the government and the central bank, says Manturov (Bitcoin News).
Elvira Nabiulina, the governor of Russia's central bank, recently said the bank could not accept investments in cryptocurrencies, which account for roughly $5 billion in annual transactions by Russians, and recommended banning their trading and mining.
However, according to Manturov, the government and the central bank may be getting closer to resolving their dispute.
Before Russia's invasion of Ukraine on February 24, the finance ministry proposed legislative measures that were inconsistent with the central bank's desire for a total ban.
Russia is moving towards legalizing crypto
At a forum, Manturov was asked if he believed that cryptocurrencies would become legal as a form of payment.
Manturov replied: “The question is, when this happens, how will it be regulated, given that the central bank and the government are actively working on this.
"However, the general consensus is that ... sooner or later this will be implemented in some form," the Russian official explained.
The total cryptocurrency market capitalization of $1.24 trillion on the daily chart | Source: TradingView.com
As of 2020, Russian banks are allowed to set up cryptocurrency exchanges under the supervision of the central bank, and new digital currencies can be minted, but only under the supervision of the central bank.
This demonstrates a more hands-on approach to cryptocurrencies and their adoption in Russia compared to what some predicted would be an almost complete moratorium on cryptocurrency activities in the nation.
Moscow intends to launch its own digital ruble, but the Kremlin has only recently backed the use of private cryptocurrencies after years of arguing they could be used to launder money or finance terrorists.
Other central bank officials said last year that they saw no place for cryptocurrencies in the Russian financial market, citing threats to financial stability posed by the growing number of cryptocurrencies.
Featured image by CoinLive, graphics by TradingView.com