Industry and Trade Minister Denis Manturov stated on Wednesday that Russia will eventually legalize cryptocurrencies as a form of payment, indicating that the government and central bank may be moving closer to resolving their disputes.
Prior to Russia's deployment of tens of thousands of troops into Ukraine on February 24, the finance ministry made legislative measures that were in conflict with the central bank's desire for a blanket prohibition.
At a conference, Manturov was asked if he believed cryptocurrencies will become legal as a form of payment.
"Everyone generally recognizes that... sooner or later, this will be implemented in some form or another," Manturov stated.
"The concern is, when this occurs, how it will be controlled, given that the government and the central bank are actively working on it," he added.
Russia intends to launch its own digital rouble, but the Kremlin has only lately come around to backing the usage of private cryptocurrencies after arguing for years that they could be used to launder money or fund terrorists.
Elvira Nabiullina, governor of the Central Bank, has stated that the bank cannot accept investments in cryptocurrencies, which account for approximately $5 billion in annual transactions by Russians, and has advocated outlawing their trading and mining.
Other central bank officials stated last year that they did not see a place for cryptocurrencies in the Russian financial market, citing threats to financial stability posed by the growing number of crypto transactions.
Manturov stated that the central bank would initially develop restrictions for the usage of cryptocurrencies, followed by the government.
Based on a proposal from the Ministry of Finance, the Russian government accepted the concept of regulating bitcoin and other cryptocurrencies in February of last year. The Ministry of Finance also submitted a bill in the same month.
According to reports, the Ministry of Finance anticipates that legislation regulating bitcoin and other cryptocurrencies will be introduced this year and is also working on the taxation of cryptocurrencies.
The Russian government is now contemplating the future of cryptocurrency and mining. The Bank of Russia advocated for a total ban on cryptocurrencies, citing dangers to the current financial system.
Meanwhile, the continuous functioning of cryptocurrency exchanges such as Local Bitcoins, Binance, and Yobit in Russia has been a source of concern for U.S. officials for some time.
Even before Russia's invasion of Ukraine, the Treasury Department issued a warning that cryptocurrency might undercut the sanctions imposed on Russia for its 2014 annexation of Crimea.