Russia to legalise cryptocurrencies as a means of payment

Industry and Trade Minister Denis Manturov said on Wednesday that Russia will legalise cryptocurrencies as a means of payment, suggesting that the government and central bank may be moving closer to settling their differences.

Shortly before Russia sent tens of thousands of troops into Ukraine on February 24, the finance ministry submitted legislative proposals that conflicted with the central bank's demand for a blanket ban.

Mr Manturov was asked if he believed cryptocurrencies would become legal as a means of payment.

He replied that when this happens, how it will be regulated now that the central bank and government are actively working on it.

It's likely that this will be implemented in some format or other way, and everyone tends to understand that this will be implemented sooner or later. Russia has plans to issue its own digital currency, but the government has recently come round to supporting the use of private cryptocurrencies, having argued for years that they could be used in money laundering or to finance terrorism.

The bank can't accept investments in cryptocurrencies, which account for $5 billion worth of transactions a year by Russians, and has proposed banning trading and mining them, according to Central Bank Governor Elvira Nabiullina.

Other central bank officials said last year they did not see room for cryptocurrencies to be used in the Russian financial market, citing risks to financial stability from the rising number of transactions.

Manturov said regulations for the use of cryptocurrencies would be set by the central bank and then by the government in the first instance.