The Russian Ministry of Economy is calling for a "controllable market" rather than a ban on cryptocurrencies

Russian Economy Ministry calls for a "controllable market" rather than a ban on cryptocurrencies - bitcoin legal in RussiaThe Russian economy ministry disagrees with the government which prohibits the use of cryptocurrencies. In a letter to the country's parliament, the nation's Ministry of Economic Development criticized a package of bills recently introduced by lawmakers.

If approved, Russia would finally have its first regulatory regime for cryptocurrencies and digital assets, but would basically ban any activity that favors crypto transactions.

Cryptocurrency oriented businesses like Bitcoin system they would be pushed out of the country, damaging the local economy. The Ministry of Economy, however, would like a different approach that will allow it to work on creating a "controllable cryptocurrency market" in Russia.

"Bitcoin treated like marijuana"

The bill, introduced in late May as a supplement to the previous digital assets law, considers illegal any activity that facilitates the issuance and operation of virtual currencies and the use of Russian servers or websites registered by Russian suppliers.

This includes the purchase of cryptocurrency with fiat currency and payments in cryptocurrencies. However, possession of cryptocurrency is legal if it is inherited, transferred as a result of bankruptcy proceedings or seized following a court decision.

In addition, the potential for issuing digital securities is included, but this must be done under the full control of the central bank. Sarkis Darbinyan, a computer lawyer at the Moscow-based law firm, the Digital Rights Center, believes that if the law is passed in its current form, the cryptocurrency in Russia will go from the gray zone "to the darkness of the digital subsoil. "

In fact, bitcoin would get the same status as marijuana. You can use it limited under the eye of the state, but you can't talk about it or write about it, "said Darbinyan. According to the bill, he continued, cryptocurrency owners should report their holdings for tax purposes in order to make them available to the country's law enforcement agencies promptly.

A threat to miners

The proposed regulation also appears problematic for Russian cryptocurrency miners. Although mining is not explicitly mentioned in the draft, the ban on the draft law on "emissions" of digital resources is also expected to affect that sector.

The mining industry in Russia is still not large enough to have strong lobbyists who can help push regulatory demands. Generally, miners cannot be as agile as over-the-counter brokers in moving to other jurisdictions because relocating a building full of mining machines is a much bigger logistical problem than relocating an office.

However, the largest mining companies in Russia, which tend to keep their businesses secret, could have a quick and easy solution to their legal problems. “You register a company overseas, say, in Hong Kong.

This company places the miners in a data center in Russia and the company registered in Russia is not issuing cryptocurrency, "said a source who asked to remain anonymous. But not everyone can afford such tricks and small miners could be forced to shut down or operate illegally.