MOSCOW – A simmering dispute over the regulation of cryptocurrencies in Russia heated up on Friday when the Ministry of Finance presented legislative proposals that collided with the central bank’s demand for a blanket ban.

The Bank of Russia has proposed a ban on cryptocurrency trading and mining due to the threat digital currencies pose to financial stability. The Finance Ministry disagrees and President Vladimir Putin has asked the authorities to reach a consensus.

Finance Minister Anton Siluanov told state television channel Rossiya-24 on Friday that he hoped the disagreements could be worked out and a bill passed regulating CRYPTOCURRENCIES It happened at the end of the year. He said that the government would make the final decision.

“I hope that, in the best case, it can be approved in the spring session,” Siluanov said, although he acknowledged that broader debates could prolong its approval.

Siluanov said his ministry proposed identifying cryptocurrency traders, which he said would separate the “white” market from the “grey” market.

Giving law enforcement the power to track money flows and transactions can diminish one of cryptocurrencies’ main selling points: its anonymity.

“The Russian government… appears to have taken the position that crypto assets are here to stay and is contemplating legislation with the aim of bringing the industry ‘out of the shadows’ and creating an opportunity for legal businesses,” David Henderson said. , senior associate at Browne Jacobson.

However, a document seen by Reuters shows that the central bank does not support the ministry’s proposals and wants a complete ban on the issuance and circulation of cryptocurrencies.

The finance ministry and central bank did not immediately respond to Reuters requests for comment.

Andrei KladovFormer cryptocurrency expert at the Russian Internet Initiatives Development Fund and now engaged in digital banking in South Africa, said their diametrically opposed views could significantly hamper the development of the market, giving time for the gray market to become even more Gray.

“A prohibitionist stance is absolutely useless, like banning umbrellas because 50 years ago someone killed a man with an umbrella,” Kladov said. “Everyone has umbrellas and every fifth or tenth person has cryptocurrency.”

The central bank estimates the annual volume of cryptocurrency transactions in Russia at around $5 billion.

Despite the dispute, Siluanov said his ministry was working with the central bank to ensure that crypto assets did not appear on bank balance sheets.

(Reporting by Elena Fabrichnaya and Alexander Marrow; Editing by Mark Heinrich and Christina Fincher)