KEY POINTS
- Lugovoy particularly said that 'Bitcoin mining' should be regulated first, to be followed by other altcoins
- He added that equipment-related regulation should also be tackled to ensure 'transparency'
- Russia's central bank and finance ministry have been in a years-long dispute over crypto regulations
The Russian parliament's chief cryptocurrency expert has suggested that Russia, one of the world's largest crypto-mining countries, may prioritize Bitcoin mining in discussions regarding the regulatory approach the country should take in terms of cryptocurrencies.
In an interview with Russian outlet Happy Coin News published Monday, Andrey Lugovoy revealed that there have been 10 discussions so far with players in the banking, industry, science, energy, and crypto industries regarding regulations, and results from reviews of the discussions will be released "very soon."
Asked how exactly Russia will move forward in regulating cryptocurrencies, considering the many characteristics of various digital assets, he said the most important thing in regulation is to "see how effective the adopted standards are," as per a Google translation. Lugovoy, the chair of the Russian government's Working Group on Regulation of the Cryptocurrency Market, noted that there is always a "first step" in regulation.
"The first step in regulation should be mining. Here were are talking mainly about Bitcoin mining. Regulation of so-called altcoins and their various variations will come later. As anti-money laundering and anti-terrorist financing rules are imposed on the cryptocurrency sector, confidential coins will most likely be prohibited, since their use for criminal purposes is very high," he noted.
He explained further that among the mining regulations that could be adopted is the "marking of mining equipment imported into the Russian Federation to ensure transparency of activities, including the cryptocurrency mined." Mined crypto "should not be 'painted' as being produced in Russia," he added.
It is worth noting that Russia's finance ministry has been in a deadlock with the central bank for years over crypto regulations. The disputing sides have had contradicting views of how the emerging sector should be reined in as demand for digital asset services increases.
The Russian central bank reportedly wants an outright ban on cryptocurrencies in the country, while the finance ministry has been wanting to discuss with the central bank how digital assets should be used within the country and abroad for settlement-related matters. Regulation with a step-by-step approach as suggested by Lugovoi may help resolve the dispute between the country's finance leaders.
Meanwhile, Russian crypto sector leaders recently sent in proposals to finance-related ministries in the country with the goal of helping craft a bill on crypto mining. Among the proposed provisions, as per ComNews, is the establishment of a "classic taxation system for miners with the possibility of conducting activities on principles that do not distinguish (discredit) them from any other type of business activity."
Russia has fallen behind in crypto regulations due to the dispute between the finance ministry and the central bank, but it appears the two sides are now more open to a compromise as Russia's crypto sector expands along with the demand.
