Russian authorities delay decision on cryptocurrency regulation until year end

After efforts to create, review, and approve new cryptocurrency regulations following a presidential decree as early as early July, Russian authorities have decided to postpone the decision to a later date. The delay in the bill that will regulate the crypto sector has left the crypto space still shrouded in uncertainty.

It is not clear why the bill was delayed. Some speculate that the reason may be that the House of Representatives disagrees with the status of cryptocurrencies in Russia. At one point it seemed that the country was on the verge of accepting new forms of finance, but the delay in regulation confirmed their hesitation. Now, those who want to participate in cryptocurrency trading hope that the authorities will finally make a decision before the end of the year.

This did not go down well with members of the country’s cryptocurrency community. People who bought cryptocurrencies now have to wait again to learn about the consequences of using cryptocurrencies.

According to Anatoly Aksakov, the chairman of the State Duma Committee on Financial Markets, the bill will be reviewed again this autumn. However, legislators are still quite uncertain about how to deal with cryptocurrencies, especially those in the lower house. Aksakov himself said that the law of the central federal body must decide whether to ban cryptocurrencies as a trading instrument. If so, no trading point or stock exchange will be allowed to work with cryptocurrencies.

He added that cryptocurrencies must be clearly defined and the legislature has only two options: either support cryptocurrency trading in Russia or ban it. However, if a ban is chosen, Russian citizens will still be allowed to trade cryptocurrencies on foreign exchanges, according to Aksakov.

Russia still undecided

This is the first delay for the Digital Financial Assets Act, which is intended to regulate cryptocurrencies. The first delay occurred in May this year due to the Financial Action Task Force (FATF)'s request for virtual currency regulation.

In June, Russian Deputy Finance Minister Alexey Moiseev hinted that the bill might be passed at the second reading. However, the authorities appear to have no such intentions, and the decision, like any issue related to virtual currencies, has been delayed.

Even the country’s president, Vladimir Putin, ordered lawmakers to come up with regulations by July 1, 2018. However, by that date, nothing had been done. Putin then gave a second deadline – July 1, 2019. Again, nothing happened, although regulators at least appear to be getting a little closer to Putin’s deadline.

There seems to be a big difference in attitudes towards cryptocurrencies in Russia. The Kremlin seems to be very skeptical of digital currencies, and despite the authorities’ attempts to embrace the new technology, the skepticism remains quite strong.

Meanwhile, the Russian Central Bank reportedly plans to launch its own cryptocurrency backed by gold. Then, the head of the bank, Elvira Nabunilina, said that digital currencies will never replace traditional currencies. Then, Facebook's Libra project came along, and Russian authorities announced that it will be treated like any other currency, meaning it will not be legalized. However, they also do not plan to ban it, as the country believes that Libra does not pose a threat to the ruble.