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Proposed bill banning cryptocurrency opposed by Russia’s Ministry of Economic Development

Russia's Ministry of Economic Development criticized a proposed bill that seeks to totally ban cryptocurrency use in the country.

Image by Michael Siebert / Pixabay

Wed, 17 Jun 2020, 02:42 am UTC

Russia’s Ministry of Economic Development expressed its disapproval of a proposed bill that plans to impose a total ban on cryptocurrency usage in the country. The ministry explained that such a bill would backfire and become ineffective as crypto users could just employ technology to circumvent it, which could eventually lead to a more problematic “uncontrolled black market” for digital assets.

Russian publication Kommersant claimed that the Ministry of Economic Development sent a letter to the State Duma that criticized the proposed bill that would ban cryptocurrency use in the country, according to Bitcoin.com.

The report said that under the proposed bill seeks a complete ban on the issuance as well as circulation of existing cryptocurrencies in the country. The bill also proposes to penalize individual entrepreneurs and legal entities engaged in crypto-related activities.

In the letter, the ministry currently regulation does not offer protection to the rights of crypto users in cross-border transactions. As a result, the situation might push all operations outside of the country which could mean losses to its economy.

Instead of a total ban, the ministry proposed some changes to the bill so that it may provide for “the creation of mechanisms for the controlled circulation of cryptocurrencies.” One way that to oversee the crypto market is to establish requirements for the “issuance and turnover of cryptocurrencies and their operators.”

In its letter, the ministry also pointed out the procedures and guidelines that will govern cryptocurrency firms should be properly established. “Sub-legislative regulation of this issue is proposed to be attributed to the powers of the government of the Russian Federation (together with the Bank of Russia),” the ministry said.

Meanwhile, chairman of the State Duma Committee of Financial Market Anatoly Aksakov said that he has not yet seen the letter. However, he expressed pleasure in receiving criticism from the Ministry of Economic Development.

“It’s good that they criticize, we don’t need approval, we need criticism,” Aksakov said. He also revealed that the Bank of Russia, the country’s central bank “generally supports the bill with some changes.”

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