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Russia finance chief says crypto currencies are a fact of life

Russia finance chief says crypto currencies are a fact of life
October 17
13:21 2017

Russia’s finance minister has detailed the wide-ranging assessment his country is undertaking on cryptocurrencies, saying they’re a “fact of life” that need to be monitored but ultimately accepted and regulated.

“Cryptocurrencies are a fact of life … We need to create a legal framework for these operations, we need to control these operations if these operations contravene the law, including money laundering legislation,” Anton Siluanov, the minister of finance for Russia told CNBC on the sidelines of the International Monetary Fund meetings in Washington, D.C.

Speaking about the full range of digital currencies, not just bitcoin, he said that Russia is planning the state regulation of the mining, circulation and the buying and selling of these currencies.

This, he said, was not just to generate tax revenues but to protect the people and investors using cryptocurrencies.

“The state cannot remain on the sidelines. The state sees all the risks that might arise during the purchase and sale of these cryptocurrencies, especially for the general public, who do not always have the requisite level of education,” he said.

Bitcoin a ‘fraud’

His comments follow a recent flurry of discussion on cryptocurrencies from top figures in the business world. IMF Managing Director Christine Lagarde told CNBC on Thursday that there could be “massive disruptions” from digital currencies.

JPMorgan Chase CEO Jamie Dimon recently called bitcoin a “fraud.” At an Institute of International Finance conference Friday he added: “If you’re stupid enough to buy it, you’ll pay the price for it one day.”

At the same meeting BlackRock CEO Larry Fink also took a shot at bitcoin, calling it an “index of money laundering.”

Siluanov said Russia was analyzing the experience of other countries, including the U.S., Europe and Japan.

“As a matter of fact, in America cryptocurrencies are also subject to regulation, including regulation as a stock commodity. Therefore, we believe that just closing our eyes and not looking at what is going on is not the right thing to do,” he told CNBC.

“And I agree that cryptocurrencies in part finance the shadow sector, which, of course, is a worry for the state. And in this regard, the question of knowing who the agents are, the question of registration of mining companies and those companies that emit cryptocurrencies should undoubtedly be under the control of the state,” he said, speaking directly on the comments made by Fink and Dimon.

‘Unlawful activities’

Back in Russia, President Vladimir Putin said Tuesday that “buyers of cryptocurrencies could be involved in unlawful activities,” according to a Reuters report. Russia’s central bank also said it would block websites of exchanges that are offering cryptocurrencies.

The country has some of the strictest regulation on bitcoin along with China. The world’s second-largest economy recently banned cryptocurrency exchanges.

Russia’s regulatory tone contrasts with other countries, such as Japan, which recently passed a law allowing retailers to accept bitcoin for payment.

Bitcoin has been rallying in the past few days, hitting a new record high on Friday. At its all-time high, bitcoin had risen around 480 percent year to date.

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