Russian Government Reverses Crypto Exchange Ban Plans

The Russian government is reportedly set to reverse its decision to ban crypto exchanges, a move confirmed by Anton Gorelkin, Deputy Chairman of the State Duma’s Committee on Information Policy. This marks a significant shift in the country's approach to cryptocurrency regulation.

Lawmakers’ Concerns

In a Telegram post, Gorelkin mentioned that many lawmakers had serious reservations about shutting down domestic crypto exchanges. The proposed ban had caused significant concerns among industry representatives.

Ongoing Disputes

For years, the Russian ministries and the Central Bank have been at odds over policies related to crypto mining and exchanges, resulting in a regulatory deadlock. This impasse has left the nation's growing crypto mining industry largely unregulated.

Presidential Intervention

Earlier this month, President Vladimir Putin urged lawmakers to resolve the deadlock and expedite crypto mining legislation. In response, lawmakers have committed to passing two crypto-related bills by the end of the current parliamentary session on August 5.

Central Bank’s Stance

The Central Bank had initially proposed a ban on crypto exchanges, intending to allow only a few platforms to operate within a special sandbox for cross-border trade payments. However, lawmakers found this proposal impractical and have since removed the clause banning the organization of cryptocurrency circulation.

Advertising Ban and Mining Regulations

While the ban on crypto exchanges may be lifted, lawmakers plan to uphold a ban on advertising crypto-related products and services in Russia. Additionally, a proposal to cap electricity usage for private crypto mining has been rejected. However, legislation permitting companies to use crypto for international trade settlements is likely to pass.

Regulatory Developments

The Central Bank aims to require companies to use a government-approved sandbox for cross-border crypto transactions. Gorelkin mentioned that specific details about the sandbox would not be disclosed to avoid benefiting foreign opponents, adhering to the saying "money loves silence."

Legislative Progress

Both the mining bill and a bill concerning the sandbox have passed their first readings in the Duma. Lawmakers are working against time to meet their deadline, needing to pass further readings and committee discussions. The Financial Markets Committee has indicated that the sandbox bill is ready for a second vote, with a clause to establish a regulator for digital currency settlements.

Local Authority on Mining

President Putin has noted that crypto mining accounts for 1.5% of Russia’s energy usage. He suggested that regional authorities should have the power to issue local bans on crypto mining.