Vladimir Putin told Russian financial officials on Tuesday that cryptocurrencies need regulation, though he cautioned against imposing excessive restrictions. Putin held the meeting in Sochi with Elv
Vladimir Putin told Russian financial officials on Tuesday that cryptocurrencies need regulation, though he cautioned against imposing excessive restrictions.
Putin held the meeting in Sochi with Elvira Nabiullina, the Bank of Russia's governor, Finance Minister Anton Siluanov, and Kremlin economic aide Andrey Belousov. The president acknowledged that "in a number of countries, cryptocurrencies are becoming or have already become a full-fledged means of payment, as well as a means of investment," but he also said "cryptocurrencies usage, at the same time, bears significant risks."
His position sits between two competing camps inside Russia's government. Siluanov has pushed for legalization and regulation, telling people in September that there was "no sense in banning" cryptocurrencies. In April, he argued that digital currencies would likely be legalized and regulated in 2018 to prevent money laundering. "The state needs to know who at every moment of time stands on both sides of the financial chain," Siluanov said. "If there's a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations."
Putin's framing echoed that reasoning. He called for a regulatory framework against money laundering, tax evasion, and terrorism financing, but added that "it's also important not to put up too many barriers."
Nabiullina opposed regulation. "We are totally opposed to private money, no matter if it is in physical or virtual form," she said. Previously, she stated "we don't legalise pyramid schemes," signaling her skepticism of crypto assets.
Sergey Shvetsov, the Bank of Russia's first deputy governor, expanded on that position. He pointed out that "bitcoin has transformed from a payment unit into an asset, which is bought in order to obtain a high yield in a short period of time. This is the definition of a pyramid." At a conference earlier this month, he also called cryptocurrencies "dubious instruments" that carry "unreasonably high risks."
According to Bloomberg, the central bank is unlikely to budge unless Putin mandates action. The bank has already signaled it will support blocking access to foreign websites that sell digital currencies in Russia.
Putin's comments arrive amid growing curiosity about crypto inside Russia. The finance ministry has asked for legalization to shield investors from additional hazards. In June, Vitalik Buterin, Ethereum's co-founder, met with Putin to pitch the potential of blockchain technology in Russia.
