Russia could consider crypto bank to combat fraud, help miners

Russia needs its own crypto-enabled bank that could help combat illicit transactions and support miners by providing infrastructure for them to cash out their earnings, a member of the country’s government oversight body says.

Evgeny Masharov, a member of the Russian Civic Chamber, which examines draft laws, told the state-owned news agency TASS on Tuesday that Russia should follow its ally Belarus in launching a crypto exchange service through a major financial institution.

Masharov said the move would “solve a number of current problems,” such as bringing “shadow transactions” into the legal field while also “replenishing the federal budget’s income,” and blocking one of the “channels for financing and recruiting our citizens to commit serious crimes.”

Russia banned payments via crypto in early 2022, but it has become open to the sector as it looks to trade internationally and skirt the sanctions it faces for its invasion of Ukraine. 

It has so far allowed financial institutions to offer crypto-based products to accredited investors in May and floated plans for a Ruble-pegged stablecoin in April.

Crypto bank could help miners too

Masharov argued that a crypto bank could aid the country’s crypto mining industry, as there is currently no infrastructure for them to sell the crypto they’ve mined.

Russia banned mining in 10 out of 46 Russian regions for six years on Jan. 1 and approved seasonal restrictions in key mining regions to help combat rising energy demands.

However, Vyacheslav Kopylov, a representative of local crypto mining firm Prostomining, told Cointelegraph in June that despite the restrictions, the industry continues to thrive and Russia’s Blockchain Forum has increasingly featured businesses involved in crypto mining.

A way to combat fraud 

Masharov said a crypto bank could help combat fraud as it would be a regulated institution overseeing all transactions.

Related: Russia civic chamber proposes dedicated fund for confiscated crypto assets

“In this case, settlements in the said bank must be made in cryptocurrencies, and funds must be credited only through the current accounts of Russian citizens,” he said.