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Putin Urges Government, Central Bank to Reach Consensus on Crypto, Highlights Russia’s Mining Potential

27/01/2022 by Idelto Editor

Putin Urges Government, Central Bank for Common Stance on Crypto, Highlights Russia’s Mining Potential

President Vladimir Putin has joined the debate on the future of cryptocurrencies in Russia, calling on the government and central bank to work out a common position on their regulation. The Russian leader also emphasized Russia’s strengths as a crypto mining destination.

Putin Asks Ministers and Bankers to Report Back With Consensus on Cryptocurrencies

Russian President Vladimir Putin has added his comments to the ongoing discussion on how to put Russia’s growing crypto space in order. At the start of a video conference with the members of the Russian government, Putin gave his take on “an issue that is currently in the spotlight – the regulation of cryptocurrencies.”

The Central Bank of Russia has its own position, Putin said, acknowledging some of the concerns expressed by the monetary authority. The head of state noted that the bank’s experts believe the expansion of crypto-related activities carries certain risks, first of all for Russian citizens, given the high volatility and other aspects.

The president also pointed out that Bank of Russia does not stand in the way of progress and is making the necessary efforts to introduce the latest technologies in this field. His remarks come after the CBR recently launched the pilot phase of its digital ruble project.

A week ago, Russia’s central bank proposed a blanket ban on a range of operations involving other digital coins including the issuing, use, investing, trading, and mining of cryptocurrencies like bitcoin. Its hardline stance, elaborated in a consultation paper on the matter, was met with opposition from members of the government and parliament in Moscow.

This week, the Ministry of Finance joined the front against the CBR. The head of its Financial Policy Department, Ivan Chebeskov, insisted that the crypto market needs to be regulated, not banned. In his view, the main task is to provide protection for the interests of investors and citizens who use cryptocurrencies, which requires regulation, not prohibition.

According to a report by the business news portal RBC on Thursday, the finance ministry has prepared its own proposal for the regulation of cryptocurrencies without their prohibition. The department suggests all crypto-related transactions should be carried out through Russian banks. It also calls for introducing identification for Russians owning crypto wallets and dividing investors into two groups — qualified and non-qualified.

In his address to the members of the Russian cabinet, Vladimir Putin also stated:

I would ask both the Government of Russia and the Central Bank to come to some kind of unanimous opinion during the discussion, and I would ask you to hold this discussion in the near future, and then report on the results that will be achieved.

The Russian president also highlighted his country’s “competitive advantages” as far as crypto mining is concerned. Putin pointed to the surplus of electricity in energy-rich Russia as well as the availability of a qualified workforce. Russia’s significance on the bitcoin mining map has increased since China launched a crackdown on the industry last year.

Do you think Russian government institutions will agree on a common policy regarding cryptocurrency regulation? Share your thoughts on the subject in the comments section below.

Bank of Russia Proposes Wide Ban on Cryptocurrency Use, Trade, Mining

21/01/2022 by Idelto Editor

True to its hardline stance on decentralized digital money, the Central Bank of Russia is now pushing for a wide-ranging ban on crypto-related activities such as issuance, exchange, and mining. A consultation paper published by the regulator cites threats to financial stability and citizens’ wellbeing among the main reasons for the proposed restrictions.

Russia’s Central Bank Seeks Public Opinion on Restrictive Crypto Policy

The monetary authority of Russia is advocating a ban on an array of crypto activities in a report titled “Cryptocurrencies: Trends, Risks, Measures.” The document was published Thursday and the regulator awaits comments and suggestions on its contents until March 1. In the paper, the Central Bank of Russia (CBR) acknowledges the rapid growth of the global crypto market in the past year as well as the annual $5 billion in crypto transactions made by Russians.

At the same time, the bank points out that the growth in value is determined mainly by speculative demand which is forming a bubble, and that cryptocurrencies have the characteristics of a financial pyramid. Their spread, it says, poses threats to the stability of Russia’s financial system, monetary policy sovereignty, and the wellbeing of its citizens.

To reduce these threats and risk of illegal activity, Bank of Russia intends to collaborate with the Russian government and parliament in the coming months on a number of proposed legal amendments. These include the introduction of legal liability for violations of the ban on the use of crypto as a means of payment for goods and services.

The authority has often referred to cryptocurrencies like bitcoin and stablecoins as “monetary surrogates” that are prohibited under current Russian law. It now wants to ban their issuance and circulation in the Russian economy, including through digital asset exchanges and peer-to-peer platforms.

The central bank has also opposed crypto investments and intends to prohibit financial organizations from investing in cryptocurrencies and crypto-based financial instruments. It insists that the Russian financial infrastructure and intermediaries should not be used to facilitate cryptocurrency operations.

Mining cannot be ignored either, Bank of Russia says, as it increases the involvement of the population and the economy in the crypto market. The regulator believes the current scale and further spread of the activity bring significant risks for the environment and energy supply. Prohibition is the best solution, the CBR says.

Amid China’s crackdown on the industry, energy-rich Russia has become a mining hotspot. The minting of digital currencies is not only a profitable business but also an additional income source for many households that have access to subsidized electricity. Authorities in some regions have complained about rising energy consumption that strains power grids.

Bank of Russia plans to improve its monitoring of crypto operations. It intends to work closer with financial regulators in other jurisdictions as part of these efforts, especially in order to gather information about transactions conducted by Russian citizens. The bank’s proposal, however, does not envisage restrictions on owning cryptocurrency outside of Russia, as noted by the head of the central bank’s Financial Stability Department, Elizaveta Danilova.

In advance of presenting its view on crypto regulations in this report, the Central Bank of Russia stated last month that it sees no place for cryptocurrencies in the country’s financial market. Media reports have indicated that other Russian government institutions do not share its conservative position. A working group set up by the State Duma, the lower house of Russian parliament, is now preparing proposals to comprehensively regulate the Russian crypto space.

Do you expect the Russian government to support Bank of Russia’s proposal to restrict crypto activities? Tell us in the comments section below.

Pakistan Government Not Against Crypto Investments, High Court Calls for Regulations

23/10/2021 by Idelto Editor

The executive power will not oppose cryptocurrency investments, a high-ranking government official has told lawmakers in Pakistan. The statement comes as a regional high court has urged the federal government to regulate cryptocurrencies and formed a committee to look into the matter in the coming months.

Minister Says Pakistan Government Has No Objection to Investments in Crypto

Addressing members of the National Assembly this week, Pakistan’s Minister of State for Parliamentary Affairs, Ali Muhammad Khan, recognized cryptocurrency as a new concept. He then noted that the government did not have any objection if the Pakistani youth would take the opportunity to invest through this new technology.

Khan made the comments on Wednesday in response to a calling attention notice in the lower house of parliament regarding the absence of a regulatory framework for cryptocurrencies in the country, the Daily Times reported. The minister explained that the government did not oppose their regulation but pointed out that the State Bank of Pakistan (SBP) had some reservations that needed to be addressed.

The government official revealed that the monetary authority is currently reviewing the matter which should be referred to the Finance Committee. “The SBP was saying we should move forward in this regard very carefully,” Ali Khan added.

The change in course comes three years after the State Bank of Pakistan introduced a cryptocurrency ban. In a circular released in the spring of 2018, the SBP stated that virtual currencies like bitcoin, pakcoin, onecoin and tokens from initial coin offerings are not legal tender and prohibited all dealings with them including holding, transferring, and trading.

At the time, the bank further emphasized that no entity or individual was authorized to issue, buy, sell, or exchange the digital coins. But in April of this year, the head of the SBP, Reza Baqir, said that the regulator was studying cryptocurrencies and their potential for bringing transactions taking place off the books into a regulatory framework.

Regional High Court Orders Government to Report on Crypto Regulations

Again on Wednesday, the Sindh High Court, the highest judicial authority in the southeastern Pakistani province, urged the government in Islamabad to adopt cryptocurrency regulations. It also formed a committee headed by the federal finance secretary and tasked it with producing a report on the matter within the next three months.

During a hearing of a petition challenging the crypto ban, the court insisted steps should be taken to regulate cryptocurrencies in consultation with all stakeholders, including the Security and Exchange Commission of Pakistan (SECP), the SBP, the Ministry of Law and Justice, and the Ministry of Information Technology and Telecommunication. According to a report by the Express Tribune, the proceedings were attended by members of the Federal Investigation Agency (FIA), SBP, and the petitioners.

The publication also informed of another crypto-related case that had been heard at the Lahore High Court with the participation of legal representatives of several interested parties such as the SECP, SBP, FIA, and the federal government. The English-language daily revealed that the court sought assistance from the institutions on the subject, asking them to present relevant legal positions.

As the popularity of cryptocurrencies increases globally, many Pakistanis have turned their attention to these assets as well. The newspaper points to the large number of social media groups explaining how to buy, trade, and mine crypto as Youtube videos in Urdu devoted to bitcoin have hundreds of thousands of views. More and more traders from Pakistan are using online cryptocurrency exchanges and crypto applications often have more downloads than the apps of the country’s largest banks.

Do you expect Pakistan to adopt crypto-friendly regulations in the near future? Tell us what you think in the comments section below.

Danske Bank Takes Position on Cryptocurrencies, Will Not Interfere With Crypto Trading

19/06/2021 by Idelto Editor

Danske Bank will not block credit cards used in crypto trading, according to its newly announced position on cryptocurrencies. The Danish bank would also accept deposits related to crypto investments, although it follows a cautious approach towards decentralized digital assets.

Denmark’s Largest Bank Clarifies Its Stance on Cryptocurrencies

Responding to mounting inquiries from customers and other stakeholders, Danske Bank has released an official position on crypto assets. “In recent years, cryptocurrencies such as bitcoin and ethereum have received significant attention from investors and media,” the bank noted, outlining its current stance on crypto trading and investing.

Denmark’s largest banking institution recognizes that “cryptocurrencies represent a significant digital innovation in financial services” and praises the “great potentials in the blockchain technology.” At the same time, it continues to maintain “a very cautious approach towards cryptocurrencies.” The bank listed several reasons for that.

In the first place, Danske finds it hard to meet its obligations to fight financial crime and money laundering as crypto trade is “not always sufficiently transparent.” Pricing is opaque and fluctuating, the bank added, leaving investors with limited market insight.

Furthermore, as crypto trading is only partially regulated, clients do not get the same level of consumer protection that comes with other financial products, Danske insisted. The bank also feels that the “extremely energy intensive” processing of cryptocurrency transactions clashes with its own ambition to promote sustainable development.

Crypto Investors Are Welcome to Deposit Funds With Danske

Citing these concerns, Danske Bank reminded customers that its platforms do not currently support the trading of cryptocurrencies and crypto-based financial instruments. The financial institution also advised against investing in digital assets or related products in general. However, the Danish banking group pledged its support for the development of crypto regulations under the new EU legislation called Regulation of Markets in Crypto Assets (MiCA) while emphasizing:

We continuously monitor developments in the area of cryptocurrencies, and as the cryptocurrency market matures and is further regulated, we will review our position.

Despite its hesitant attitude towards cryptocurrencies, Danske is not completely turning its back on crypto traders and investors. For example, the bank said it doesn’t block credit cards when they are used in crypto trading, provided customers comply with applicable anti-money laundering rules and laws. The bank also stressed it would treat deposits of funds stemming from cryptocurrency investments just like deposits from any other type of investment.

What’s your opinion about Danske Bank’s position on cryptocurrencies? Share your thoughts in the comments section below.

Lithuania Central Bank’s Policy Update Opens the Door for Crypto Payments

20/02/2019 by Idelto Editor

Financial Companies in Lithuania to Accept Cryptocurrencies Through Third Parties

The central bank of Lithuania has updated its position on cryptocurrencies and tokens issued through initial coin offerings. The regulator has revised the definition of these assets specifying the conditions under which financial institutions can operate with digital money and accept crypto payments.

Also read: Court Rules Brazil’s Bitcoin Max Exchange Can Keep Bank Account

The Term ‘Virtual Assets’ Replaces ‘Virtual Currency’

The governing board of Bank of Lithuania, the institution responsible for the Baltic nation’s monetary policy and financial markets, has recently released an updated version of its position pertaining to digital currencies. The regulator said it has taken into account the current market developments and evolving regulatory regimes in other jurisdictions.

In an announcement published on its website, Lietuvos Bankas reveals its intentions to provide all existing and potential financial market participants (FMPs) with a “level playing field.” This includes entities organizing initial coin offerings (ICOs) and businesses providing services to Lithuanian residents who want to invest in this type of financial products.

Responding to general questions about cryptocurrencies, the bank now says it has substituted the term “virtual currency,” used previously in regards to digital coins, with “virtual assets.” The new policy introduces strict rules for FMPs and describes under what circumstances they can work with virtual assets, including for payments.

Crypto Funds Open Only to Professional Investors

The financial institution emphasizes, however, that the underlying principles of its position have remained unchanged. Bank of Lithuania notes that companies offering financial services are required to separate their main activities from those associated with virtual assets.

Financial organizations are still not permitted to receive payments directly in cryptocurrency, give out crypto credits or use digital assets as collateral, except when the tokens are considered securities. The payments they accept in their accounts should only be in fiat currency to presumably limit risks associated with digital coins.

On the other hand, the new policy allows these companies to receive cryptocurrency payments processed by third-party platforms that convert the amounts to local fiat. When crypto-related services are provided, risk mitigating measures such as customer identification, limited movement of the virtual assets within the FMP and coverage with traditional assets should be applied.

The central bank’s updated position creates conditions for the registration of investment funds dealing with digital assets. However, these entities will be able to provide services only to professional investors. A number of such funds operate in other countries, the bank says, noting that they can do that in Lithuania too if they comply with the requirements of the country’s legislation and the bank’s guidelines.

Lithuania to Allow Equity ICOs

Lietuvos Bankas has also answered several questions regarding initial coin offerings (ICOs). The regulator stated that equity ICOs can be held via crowdfunding platforms and security tokens can be issued. Such activities are currently governed by country’s crowdfunding and securities laws.

The offering of crypto securities to the public should also comply with the respective EU directives that have been transposed into the Lithuanian legislation. One of the requirements is to indicate the other member states where the tokens will be placed so that the bank can notify local authorities.

What is your opinion about the changes in Lithuania’s regulatory policy toward cryptocurrencies? Share your thoughts in the comments section below.

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