Russians have invested 5 trillion rubles, or around $67 billion, in crypto. Some of these people may lose all their money as cryptocurrencies aren’t backed by anything, Anatoly Ashakov, a deputy who plays a crucial role in Russia’s regulation of the crypto space, recently stated. These people are not qualified investors, so pyramid schemes are possible, said Aksakov, who is the head of the Financial Market Committee at State Duma.
In an interview with Duma TV, the Russian lawmaker reiterated previous warnings and stated that the market for digital currency is unstable. Aksakov pointed out that crypto prices can move quickly by 20-30% in any direction.
It is therefore important to regulate the cryptocurrency market to protect our citizens and to provide taxation as well as certain rights to owners of cryptocurrency. They must however be identified.
This statement follows a similar call made by Alexander Bastrykin, the head of Russia’s Investigative Committee. Bastrykin, who answers directly at President Putin, stated last week that cryptocurrency should not be anonymous and suggested that mandatory identification for all crypto users in Russia should be established.
Anatoly Aksakov believes that crypto holdings should be reported to the government to stop their misuse to finance terrorist financing, drug trafficking and weapons acquisitions. He also mentioned taxation. While Russians are required to pay taxes on crypto profits under current legislation, a separate law on crypto taxation has yet to be passed by the Duma.
High-ranking members of the House also spoke out about the need for regulation of cryptocurrency mining. This is a lucrative business that has spread in Russia and a source of income for private citizens.
Aksakov stated that, if Russian authorities decides to legalize mining it should be registered and taxed. He also argued that different tariffs should be applied to the energy used by mining companies in accordance with Russia’s cross-subsidization program. This would result in higher electricity rates for miners.
Sergei Mironov (leader of Aksakov’s ‘A Just Russia-For Truth’ social-democratic group) urged Bank of Russia last month to legalize cryptocurrency markets and speed up the introduction of the virtual ruble. He believes that the regulator’s strict stance in the matter hampers the development and makes crypto technology dependent on Western payment system.
Many aspects of cryptocurrencies, such as mining, trading, and taxation, are still unregulated in Russia despite the January 2021 law “On Digital Financial Assets”. The Duma has set up a working group to prepare regulatory proposals.