Vladimir Putin Calls for Greater Crypto Monitoring & Regulation

Vladimir Putin says those who talk about the dangers of investing in the cryptocurrency market should be listened to.

Russian President Vladimir Putin criticized the crypto space, calling the market too risky. Speaking at the Russian Calling Investment Forum in Moscow, Putin called for greater monitoring and regulation of crypto-related activities in Russia. The statement comes at a time when Russia is considering launching its own national digital currency backed by the central bank. At least eight laws and five codes will have to be changed before Russia can get its own national digital currency.

“It is not backed by anything, [and] the volatility is very high, so the risks are very high. We also believe that we need to listen to those who talk about those high risks,” Russian publication Lenta.ru quoted Putin as saying.

Earlier in October too, Putin had expressed skepticism about the space, when he said that cryptocurrencies were too volatile to be used to settle oil contracts for now. He was asked whether he might see oil contracts denominated in cryptocurrencies instead of US dollars in the future.

Putin’s statement comes just days after the head of the Russian Federal Taxation Service (FNS) Daniil Egorov said that cryptocurrencies could cause significant damage to the national exchequer if not monitored properly. 

As part of the regulatory framework, Russia is looking at ways to respond to crypto tax evasion cases, if they come to the fore. 

A report by CoinTelegraph states that currently, crypto activities in Russia generate approximately $2 billion (about Rs 14,984 crore) in revenue without taxes.

As of January 1, 2021, cryptocurrencies were declared “allowed” in Russia – but not to be used as an exchange for goods and services. According to a Forbes report, Russians can mine, trade and hold cryptocurrencies – but using them as a payment option could put people behind bars.

Along with Russia, other countries are also looking at ways to combine taxation with cryptocurrencies. 

For example, in India, the federal finance ministry has set up a new committee to find out whether income from cryptocurrency trading can be taxed. Earlier this month, US President Joe Biden also signed a new law that includes tax reporting provisions that apply to cryptocurrencies.