- The Central Bank of Russia released a report last week proposing a total ban on cryptocurrencies.
- Some politicians disagree with that idea
- President Putin has established Russia’s competitive advantage in this area
- He sought “unanimous opinion” by the government and the central bank
In a move to stimulate hope for digital assets in Russia and the world, President Vladimir Putin said in favor of cryptocurrencies.
In a recent video conference with government members, explained that Russia has certain advantages Putin in a better position to support cryptocurrency mining. The Russian president pointed out the abundance of skilled hands and electricity as a benefit of putting the country on the box seat.
“Of course, there is also a certain competitive advantage here, especially in the so-called mining industry, which means surplus electricity available in the country and well-trained personnel.” He said.
In addition, he asked the country’s central bank to discuss with the government to reach a friendly agreement on the role of cryptocurrencies.
Putin seems to be leaning towards allowing a ban on crypto assets altogether, rather than a central bank proposal. Russia is keen to clear the air of cryptocurrencies. Last week, Speaker of the House Vyacheslav Volodin said the House of Representatives intends to focus on defining a regulatory framework for the next session.
Central bank proposal
Putin’s comments are coming at a time when the country is seeing conflicting views on cryptographic issues.
Last Thursday, the Central Bank of Russia released a report recommending a ban on cryptocurrencies. Financial regulators explained that the proposal was based on the risks associated with digital assets. In particular, banks were concerned that increased use of cryptography would mean concerns about the stability of the country’s financial system.
“The potential financial stability risks associated with cryptocurrencies are much higher in emerging markets, including Russia.” I read the report.
Officials also argue that cryptocurrencies exposed Russia to environmental problems because its massive energy use violated the country’s green agenda.
Regulate but not ban
The central bank’s proposal has not been welcomed by all parties. Disagreeable individuals, including political leaders, were rooted in regulation rather than banning this early sector.
Vladimir Gutenev, head of the Industrial Trade Commission, proposed an alternative. He told the RIA Novosti press last week that he could allow cryptocurrency mining instead of banning it, but under strict government control and regulation.
On Tuesday, Ivan Chebeskov, head of the Treasury’s fiscal policy department, opposed the idea of banning cryptocurrencies. He explained that implementing such a decision would only lag Russia behind in the industry.
Chebeskov also revealed that his ministry supports regulation and has already presented the government with a framework for the concept of regulation.