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Bank of Russia decides on whether to ban or allow crypto investments

In a recent report by Cointelegraph on December 22, the crypto news channel shared that the Bank of Russia is still allowing its citizens to invest in cryptocurrency albeit not via the local infrastructure. 

The announcement is only a few days after Governor Elvira Nabiullina indicated in an online press conference held on the Bank of Russia’s Youtube channel on December 18 that as the financial regulator of the country, the Central Bank of Russia has the means to restrict people from using crypto.

In contrast to this report, however, Vice-governor Vladimir Chistyukhin stated in TASS, Russia’s leading news publication, on December 20 that Russian citizens can still invest in crypto through foreign exchange firms. 

‘Russian citizens and businesses have the right to buy and hold cryptocurrencies but not through domestic infrastructures or intermediaries.’ This statement gives mixed signals to crypto investors in Russia since the December 18th press conference made it clear where Russia stands when it comes to crypto. 

In the press conference, the monetary authority of Russia stated that they do not welcome the crypto investments of Russian citizens. According to the head of the Central Bank of Russia Elvira Nebiullina, the reason for this is because cryptocurrencies are volatile and have the potential to be used in criminal activities. 

In her words, Governor Nebiullina said that ‘cryptocurrencies carry great risks for retail investors due to high volatility and use in illegal activities, so we cannot welcome investments in such assets.’ 

This was held after the chairman of the Russian State Duma’s Committee on Financial Market, Anatoly Aksakov shared in a December 16 press conference, as translated by Cointelegraph, that: 

‘There exists a very tough approach about the complete prohibition of cryptocurrencies, such as acquisition or ownership. There [also] exists an approach where there must be appropriate crypto exchanges, where everything is legalized, transparent, and understandable to regulatory bodies. It would be easier for the Federal Tax Service of Russia to tax such [exchange] transactions.’ 

Anatoly mentioned in the press conference that the Russian finance regulators will have to choose between banning crypto and legalizing exchange in 2022. Reports by the parliamentary hearings in the State Duma on December 20 announced that Russian citizens have already invested about 5 trillion rubles in cryptocurrency. This prompted the Russian financial regulators to take action with Anatoly Aksakov saying ‘we need to put an end to cryptocurrencies. We need to decide how we treat this phenomenon and, accordingly, in the legislation it is quite strict to spell out liability if we prohibit or restrict something.’

Without a clear decision on the legality of crypto investments, Vice governor Vladimir Chistyukhin said that the Russian government will work to provide more clarity to the regulations on the crypto industry. Chastyukhin also promised that the local authorities will consider legal initiatives regarding crypto and would describe in detail the country’s vision for the role of cryptocurrency in the Russian financial system in their advisory report. However, he hinted that the Central Bank of Russia doesn’t see a place for cryptocurrency in the Russian financial market. 

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