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Russian Central Bank Officials Question Plans to Legalize Cryptocurrency

Last Updated March 4, 2021 4:59 PM
Lester Coleman
Last Updated March 4, 2021 4:59 PM

The future of cryptocurrency in Russia remains uncertain, with central bank officials raising questions about legalizing it, according to Bloomberg .

Elvira Nabiullina, governor of Russia’s central bank, told a banking congress in Sochi Thursday it is uncertain that the country should legalize cryptocurrency.

Dmitry Skobelkin, the bank’s deputy governor, compared cryptocurrencies to a pyramid scheme, noting China’s decision this month to ban ICOs. Speaking at the same congress, he also said China does not recognize cryptocurrency as a form of payment. Skobelkin met with Chinese central bank officials earlier in the week.

Bank Officials Echo Jamie Dimon

The Russian bank officials’ comments echoed the views of Jamie Dimon, CEO of JPMorgan Chase & Co., who said Tuesday the bitcoin bubble was “worse than tulip bulbs.”

Anton Siluanov, Russia’s finance minister, wants to regulate rather than restrict cryptocurrencies.

Russia’s government plans to legalize and regulate cryptocurrencies as securities, Siluanov said last week. Support for cryptocurrencies has increased since President Vladimir Putin met with Vitalik Buterin, the founder of Ethereum, in June. Putin supports efforts to develop blockchain technology.

The Bank of Russia’s opposition could compromise attempts to legalize domestic use of cryptocurrencies.

China’s central bank ordered a halt to ICOs, which have raised at least $1.25 billion worldwide. Investors who have participated in at least 65 projects by mid July could be affected by China’s recent actions. China also closed domestic trading cryptocurrency platforms.

Also read: ‘No sense in banning crytocurrencies,’ says Russia’s finance minister

Projects Continue Despite Uncertainty

Some Russian cryptocurrency projects continue to move forward despite the uncertainty. Dmitry Marinichev, the president’s Internet ombudsman, co-owns a company that recently announced plans to raise $100 million in an ICO to fund a domestic cryptocurrency mining operation.

Sberbank PJSC, the largest Russian bank, is exploring having cryptocurrency accounts at its Swiss unit, according to Tass. The report attributed the information to Igor Bulantsev, head of Sberbank CIB.

According to plans recently announced by Siluanov, individuals or firms looking to buy virtual currencies will have to register under soon-to-be-enforced laws that will also detail a procedure for buying bitcoin and other cryptocurrencies. The purchase of cryptocurrencies would be treated akin to buying securities under new laws currently being worked on by the finance ministry.

Featured image from Shutterstock.