Putin confronts the Central Bank on the crypto issue

Russia is unlikely to abandon crypto, despite a hostile Central Bank and control-obsessed intelligence services.

✋ Last week the Central Bank of Russia proposed to ban crypto, precising later that the ban would only concern financial institutions processing crypto-related operations. The proposal was applauded by the Federal Security Service (FSB), the KGB heir, who do not like the fact that crypto is used by Russians to donate to the opposition or independent media.

? Other institutions were less categorical. The Parliament did not support it, and the Finance Minister clearly opposed the ban this week, concerned that it would make Russia fall behind the worldwide tech on innovation. He also mentioned a legal framework on crypto, which has been prepared by his Ministry and is now awaiting the government’s input. The Head of the Parliament’s Financial Markets Committee proposed to legalize crypto under the law on experimental legal regimes and test how the actors would behave under a strict control, while the Head of the Digital Development Ministry of the Tatarstan Republic proposed to create an “experimental crypto zone” in Kazan.

? The one person whose opinion outweighs everyone else’s is not a crypto hater neither. Last year President Putin said in an interview that “cryptocurrencies do have value”, and this week he reassured his government that “the Central Bank does not stand in the way of technical progress” and urged the Central Bank to work with the government to find a consensus. Moreover, he noted Russia’s competitive advantage in crypto mining, notably the surplus of electricity and skilled professionals.

⚒️ Crypto mining is indeed an industry that Russia can exel at, especially in its Northern areas where low temperatures naturally cool down the equipment.

It could also use the borderless quality of crypto for its international transactions, not to mention that the country’s IT brainpower can contribute to developing its own crypto industry, with all the jobs and taxes that it could generate.

We may hear more Russian crypto news in the future