Putin’s Russia was set to crack down on crypto and ended up embracing it in a bear hug

A document that sets the principles for cryptocurrency regulation appeared on a government website Tuesday night, according to CoinDesk. The document says cryptocurrency purchases are permitted through locally registered and licensed companies, which would require buyers to verify their identities and help government agencies track transactions.

The move is the latest by a country to weigh in on the legality of cryptocurrency, after several years during which it has operated largely in a gray zone. Some nations like El Salvador are embracing the digital asset, while others like China are banning it completely. Last week, India also took a step toward legalization by imposing a 30% tax on digital asset transfers, which some in the industry viewed as a move toward giving cryptocurrencies legitimacy.

Although the Russian government’s plan to regulate crypto requires Parliament to pass new laws, according to CoinDesk, it’s a significant step for a nation whose central bank had, in late January, called for a full crypto ban. The central bank supports the new plan, notes CoinDesk.

Russian newspaper Kommersant reported that the new regulations are likely to take effect in the second half of 2022 or in 2023.

Russia’s new regulatory stance toward crypto stands in contrast to that of U.S. regulators. Although Securities and Exchange Commission chair Gary Gensler has made it clear he wants to regulate cryptocurrencies, few specific regulations have been imposed. On the fraud side, however, the U.S. government has stepped up its policing, with the Justice Department this week charging a couple with laundering $4.6 billion of stolen Bitcoin.

Bitcoin was up 2.5% as of Wednesday afternoon, while Ethereum rose 4.8%.