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The Russian finance ministry does not want to ban circulation of cryptocurrencies as advocated by the central bank and hopes the government will help solve the crypto market regulation dilemma, Finance Minister Anton Siluanov said on Wednesday.
The Bank of Russia has proposed restricting cryptocurrency trading and mining due to concerns it may cause financial instability. But the finance ministry disagreed and President Vladimir Putin called on authorities to find a consensus.
The finance ministry and the central bank have been arguing about cryptocurrency regulation for a year and a half, Siluanov said, adding that the government is now expected to find a solution.
“We will go to our superiors with these disagreements to try to solve the discords,” Siluanov told reporters.
By the end of this week, the finance ministry is due to file its proposals to the government on how to regulate cryptocurrencies, which Russians have used in annual transactions worth about $5 billion.
“If we ban cryptocurrencies, then we need to ban the internet. We don’t use the methods that China uses,” Siluanov said.
The Bank of Russia has previously said the country needs a further adjustment of its cryptocurrency regulation, pointing to the experience of China and India.
In September, China intensified its crackdown on cryptocurrencies with a blanket ban on all crypto transactions and “mining”, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks.
Siluanov said his ministry believes that mining should not be banned but legalised and taxed instead, while banks and bourses should be used to identify players on the cryptocurrency market.
Separately on Wednesday, Valeriy Lyakh, head of the central bank’s department for countering market misconduct, reiterated his institution’s stance that cryptocurrencies carry risks for consumers of financial services.
“We do not consider it feasible to take cryptocurrencies to the regulatory field,” he said.
Fitch Ratings has warned that a ban on cryptocurrencies would limit Russia’s financial system’s exposure to risk, but may curb innovation and hinder banks’ technological development in the longer term.