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Russian Authorities Agree to Regulate Cryptocurrency Market


FILE - A Bitcoin (virtual currency) paper wallet with QR codes and a coin are seen in an illustration picture taken at La Maison du Bitcoin in Paris.

Russian authorities have agreed to regulate the cryptocurrency market and hope to set out how this regulation will work by the end of the year, Finance
Minister Anton Siluanov said on Wednesday.

Cryptocurrencies such as bitcoin enable individuals to transfer value to each other and pay for goods and services bypassing banks and the mainstream financial system.

They count technology enthusiasts, speculators attracted by big price swings and libertarians skeptical of government monetary policy among their fans worldwide. But banks have mostly steered clear of cryptocurrencies, and some governments and central banks have been strongly critical of them.

On Tuesday President Vladimir Putin chaired a meeting of senior Russian officials on the issue, and said the cryptocurrencies were risky and used for crime. Russia's central bank has said it would block websites selling bitcoin and its rivals to households.

"The president has spoken of the problems related to cryptocurrencies. These are difficulties regarding ... money laundering and cases that are related to identification issues," TASS news agency quoted Siluanov as saying on Wednesday.

"That's why we have agreed that the state should regulate the issuing of cryptocurrencies, their mining and turnover. The state should take all this under control," said Siluanov, who attended Tuesday's meeting with Putin.

Siluanov's comments echoed his earlier calls to control and supervise the market for virtual currencies. Siluanov said his ministry would work with the central bank on regulating cryptocurrencies in Russia.

Siluanov's deputy Alexei Moiseev said on Wednesday that Russia's Federal Tax Service could also be involved as Moscow wants to collect taxes from those who mine cryptocurrencies.

Bitcoin, the most well-known virtual currency that emerged in mid-2010, is increasingly popular worldwide as it promises substantial profits. One bitcoin last traded at around $4,762 , up from its initial price of less than $1.

Reporting by Andrey Ostroukh, Polina Nikolskaya and Elena Fabrichnaya; Editing by Gareth Jones.

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