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Cryptocurrencies have been allowed in Russia since January 1 of last year, but they cannot be used to buy goods or services.

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Russia has passed a new cryptocurrency law that, while not as strict as the previous prohibition, places severe restrictions on the use of cryptocurrencies as a form of payment. After 16 months, Moscow has changed its mind and will include cryptocurrencies in its financial system.

Sooner Or Later

On Thursday, Denis Manturov, Russia’s Industry, and Trade Minister said that the government and central bank would “sooner or later” legalize cryptocurrencies as a means of payment, implying that the government and central bank are getting closer to a solution. Moscow has stated its intention to create a central bank digital currency but has previously discouraged the use of private cryptocurrencies. The governor of the Russian central bank, Elvira Nabiullina, recently stated that the bank cannot accept cryptocurrency investments, which account for around $5 billion in yearly Russian transactions, and has advised that cryptocurrency trading and mining be prohibited.

Russia is Taking Steps to Legalise Cryptocurrency

Russian banks have been allowed to open cryptocurrency exchanges under the central bank’s supervision from 2020, and new digital currencies can be produced, but only under the control of the central bank. This shows a more pragmatic attitude to cryptocurrencies and their acceptability in Russia, as opposed to what some had predicted would be a near-total ban on cryptocurrency activity in the country. Moscow plans to establish its digital rouble, but after years of claiming that private cryptocurrencies could be used to launder money or fund terrorists, the Kremlin has only recently supported their use.

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