Russian government and central bank agree to treat bitcoin as currency, transactions over 600,000 rubles must be declared

The Russian government and central bank have reached an agreement on how to regulate cryptocurrencies, according to a statement on Tuesday.

The Russian government and central bank are currently working on a draft law to define cryptocurrencies as “analogs of money” rather than digital financial assets, which will be published on February 18. Cryptocurrencies can only work in the legal industry if they are fully identified through the banking system or licensed intermediaries.

Kommersant notes that trading bitcoin and holding cryptocurrencies are not prohibited in the Russian Federation; however, they must be conducted through “digital currency transaction organizers” (banks) or peer-to-peer transactions licensed in the country.

The report also highlighted that cryptocurrency transactions over 600,000 rubles (about $8,000) will have to be declared or be considered a crime. Those who illegally accept cryptocurrency payments face fines.

The news follows months of speculation about how the Russian government will handle digital currencies. While it’s unclear what this decision means for Russian businesses and citizens, Russia appears to be slowly embracing the idea of cryptocurrencies.

In January, Russia’s central bank called for a nationwide ban on cryptocurrencies in a report, warning of the speculative nature of the industry. The bank also stated that financial firms should not facilitate crypto transactions as part of a proposal to ban digital assets.

However, the proposal was opposed by the Russian Ministry of Finance. A few days after the central bank called for a ban on cryptocurrencies, Finance Ministry official Ivan Chebeskov said the government should regulate cryptocurrencies rather than ban them outright. He warned that a blanket ban could cause Russia to fall behind technologically.

There are also reports that President Putin supports efforts to regulate the country’s cryptocurrency mining industry.

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