A Putin minister assures that Russia will legalize cryptocurrencies as a means of payment “sooner or later”

Russian Industry and Trade Minister Denis Manturov (left) speaks with his Foreign Minister Sergei Lavrov during a Russian government meeting in January 2020. SPUTNIK (Reuters)

The Russian Minister of Industry and Commerce, Denis Manturov, assured this Wednesday that his country will legalize cryptocurrencies as a means of payment “sooner or later”.

The message suggests that the government and the central bank may be close to ironing out their differences on the issue.

Shortly before Russia sent tens of thousands of troops to Ukraine on February 24, the Ministry of Finance presented legislative proposals to that effect, but then they collided with the central bank's demand for a blanket ban.

Asked if he thinks cryptocurrencies will be legalized as a means of payment, Manturov replied: "The question is, when this happens, how will it be regulated, now that the central bank and the government are actively working on it."

The minister thus assumes that it will come true.

"Everyone tends to understand that sooner or later it will be implemented, one way or another."

Russia has plans to issue its own digital ruble, but the government has only recently begun to support the use of private cryptocurrencies, having argued for years that they could be used for money laundering or terrorist financing.

However, the governor of the Central Bank, Elvira Nabiullina, has said that the bank cannot accept investments in cryptocurrencies, which represent around 5,000 million dollars in transactions per year by the Russians, and has proposed to ban their sale and purchase. mining necessary for its creation.

Citing risks to financial stability from the growing number of cryptocurrency transactions, other central bank officials said last year that they saw no room for the use of cryptocurrencies in the Russian financial market.

Minister Manturov said that the regulations for the use of cryptocurrencies would be formulated in the first instance by the central bank and then by the government.

Cryptocurrencies are a minor player in the economic side of the Russian invasion of Ukraine.

Many international donations to Ukraine have used this payment method, while one of the big names in the industry, the Canadian Changpeng Zhao, founder of Binance, assures that the fall of the ruble at the beginning of Western sanctions encouraged part of the Russians to exchange their currency for bitcoins to safeguard their savings.

El Salvador and the Central African Republic, the only countries where it is legal

Until now, bitcoin, the main cryptocurrency, is only legal tender in two countries.

El Salvador was the first to accept it, and its president, Nayib Bukele, has championed that decision.

However, the strong correction suffered by the cryptocurrency market in recent weeks has called this strategy into question, and has fueled calls by organizations such as the International Monetary Fund for the country to back down.

More recently, in April, the Central African Republic, one of the poorest countries in the world, became the second state to accept bitcoin as a means of payment.

The decision comes despite the fact that the country is still a long way from having widespread access to the internet and mobile phone services.