Putin backs cryptocurrency regulation and taxation.

The Central Bank of Russia says banks and other market participants pose a serious threat to the financial system's balance.

Despite a central bank move to ban cryptocurrency mining, Russian President Vladimir Putin has approved Prime Minister Mikhail Mishustin's proposal to tax and regulate it, Bloomberg sources said.

The Russian president supports limiting cryptocurrency mining in places with excess electricity, such as Irkutsk, Krasnoyarsk, and Karelia, according to unnamed sources.

President Putin has asked the Mishustin administration and the central bank to resolve their differences, according to Kremlin spokesman Dmitry Peskov.

Russia bans cryptocurrency transactions

Earlier this week, Bloomberg reported that the Russian Federal Security Service (FSB) had persuaded the head of the Central Bank of Russia, Elvira N, to completely ban cryptocurrency trading in Russia.

Russians are increasingly sending money in cryptocurrency to "unwanted groups" and media designated as "foreign agents," according to Bloomberg.

The Central Bank began closely monitoring Russian banks' cryptocurrency transactions in late 2021, according to the publication Kommersant. This is due to "the assessment of the risks deriving from money laundering and terrorism financing."

Russia's central bank criticized the finance ministry's proposal to authorize cryptocurrency use.

In some circumstances, "A huge risk to the financial balance that banks and other market players give to the financial system, while overlooking mining issues.

The Russian administration declined to comment.

President Putin asked the Russian government and Central Bank to firmly develop a consensus on the problem and to report back to him on the outcome of the meeting.

Spotlight

Putin has stated that he is "informed of the talks that are taking place on this matter."

"The Central Bank does not stand in the way of technical advancement and makes the necessary measures to implement innovative technology in this sector," said President Putin, citing the Central Bank's position on cryptocurrencies. Regarding the Central Bank's stance on cryptocurrency, he remarked

Given the country's high level of instability, the Central Bank's experts believe that expanding such activity (in connection to cryptocurrencies) poses some risks, mainly to the country's citizens.

To be sure, Russia has "certain competitive advantages in this field, especially in so-called (cryptocurrency) mining," as Putin noted.

Concerning the benefits, he stated that  "he has in mind the surplus of electricity and the well-trained executives that the country has" in this area.

By fLEXI tEAM