Russia to regulate Bitcoin market: finance minister

FILE PHOTO: A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier/Illustration/File Photo

MOSCOW (Reuters) - Russia’s finance ministry wants to regulate the circulation of crypto-currencies involving Russian citizens and firms, Finance Minister Anton Siluanov said on Friday.

Russian financial authorities initially treated any sort of money issued by non-state approved institutions as illegal but later accepted the globally booming market of crypto-currencies.

“The state understands indeed that crypto-currencies are real. There is no sense in banning them, there is a need to regulate them,” Siluanov said.

By the end of this year, the finance ministry will finish working on a law that would define a procedure for buying crypto-currencies, which would also include registration of those willing to buy the virtual money, Siluanov said.

Buying of crypto-currencies should be similar to buying securities, such as treasury bonds for households launched by the finance ministry this year, Siluanov said.

He did not explain what the criteria would be for establishing which crypto-currency transactions would be subject to Russian regulations.

Speaking at a financial forum in central Moscow, Siluanov warned that investments in volatile crypto-currencies are risky and insecure. Previously the Russian central bank said such currencies were used in illegal operations, such as money laundering, and promised to crack down on the instrument.

Bitcoin, the most well-known virtual currency that emerged in mid-2010, is increasingly popular worldwide and in Russia as it promises substantial profits. One bitcoin last traded at around $4,460 BTC=BTSP, up from its initial price of less than $1.

Siluanov said investors should be aware of risks related to virtual currencies. He said his ministry’s task was to “make investments into such instruments regulated.... We must make an organized market out of the black market.”

Reporting by Andrey Ostroukh