Sanctions have hit the Russian economy hard and made it difficult to carry out transactions with foreign partners. Crypto may become an excellent solution to Russia’s problems, and the only thing missing is the legislation — and the government is actively working on it.
What can be done with crypto in Russia?
In January 2021, crypto was legalized in Russia under the designation of “a digital currency”. Moreover, it is considered property, which means it has the potential to be used as an investment asset. Salary can even be paid with crypto. Still, it is not legal tender, that is, it cannot be used to pay for goods and services.
Everyone is looking forward to the adoption of legislation on crypto mining. One draft was rejected in October, but Anatoly Aksakov, head of the State Duma Committee on Financial Markets, clarified that the new version may enter into force as early as July, and amendments to the Criminal Code are being prepared in this regard. This law would facilitate cross-border transactions and provide Russian investors with untainted bitcoins.
A regulatory framework instead of an exchange
As part of the work to legalize and promote crypto, the government initially planned to create a national crypto exchange as part of the Moscow Exchange. However, eventually the idea was abandoned in favor of regulating existing cryptocurrency trading platforms. Anatoly Aksakov commented that the government will now focus on developing rules for the establishment and management of cryptocurrency platforms. This shift of the approach can be regarded as a response to potential sanctions. It will allow Russian firms to process cross-border transactions and evade sanctions.
Most likely, the regulatory framework will be supervised by the Central Bank of Russia. Aksakov said that the relevant regulation will be part of the bill on experimental legal regimes. However, such platforms are unlikely to become traditional crypto exchanges. Rather, they will facilitate international transactions for exporters and importers. Allegedly, Russian crypto firms have also rejected the idea of a nation-wide crypto exchange, instead advocating the development of a regulatory framework. This approach is regarded as a way to minimize risks, address market dominance issues, and protect infrastructure from cyberattacks.
