A Russian news outlet reported on Sunday that Russian lawmakers have made the decision to abandon their plans of establishing a state-owned cryptocurrency exchange. Instead, they have opted to formulate rules and regulations for the existing enterprises in the crypto industry.
Early Monday morning, Colin Wu, known as Wu Blockchain, broke the story on Twitter and provided a translation of the Russian news outlet, which outlined the new direction of the country. The emphasis will now be on granting permission for private companies to construct and operate cryptocurrency exchanges.
Upcoming Cryptocurrency exchange rules in Russia
According to recent statements made by Anatoly Aksakov, the head of the Russian State Duma Financial Markets Committee, the government of Russia is directing its attention towards developing a comprehensive framework to regulate the establishment and operations of cryptocurrency exchanges.
Aksakov highlighted that the legislative body has discarded its previous proposal of creating a singular national cryptocurrency exchange. The reason behind this decision, as explained by Aksakov, is the inherent vulnerability of a single exchange to potential future Western sanctions.
During a recent interview with the Russian magazine Izvestia, Aksakov elaborated on the subject
“As exchanges facilitate cross-border settlements, including the circumvention of sanctions restrictions, authorities may introduce fresh regulations to address these activities. Concurrently, the landscape will witness a constant emergence of new organizations.”
The Ministry of Finance of Russia also dismissed the concept of a singular cryptocurrency exchange. Ivan Chebeskov, the director of the financial policy department within the Ministry of Finance of the Russian Federation, advocated for the implementation of comprehensive regulations governing cryptocurrency exchanges instead.
Using exchanges to bypass sanctions
Russian officials have expressed that these exchanges could serve as a means to facilitate import payments and circumvent the economic sanctions imposed by the West on Russia in response to the Russia-Ukraine conflict. The intent is to enable smoother import transactions while bypassing the adverse effects of the Western sanctions.
Stated by Alexei Guznov, deputy chairman of the Bank of Russia:
“It is highly probable that these organizations will play a pivotal role in facilitating interaction between exporters and importers, as well as facilitating cross-border settlements using digital currencies. They will enable Russian companies to make payments for parallel imports, among other transactions.”
There are additional sources that further substantiate the potential impact of regulating cryptocurrency exchanges on the Russian financial system. Alexey Tarapovsky, the founder of Anderida Financial Group, shared with Izvestia that Western businesses exhibit a significant interest in conducting such payments, with an estimated annual volume of around $10 billion in digital currencies being processed already. This underscores the growing significance of these transactions within the global financial landscape.
Over the years, Russian authorities have displayed fluctuating attitudes towards the digital asset space. In early the previous year, the Bank of Russia introduced a proposal to ban crypto payments, followed by the Ministry of Finance’s submission of a regulatory framework for Bitcoin. Subsequently, Vladimir Putin enacted a law to prohibit payments involving digital assets. However, it is noteworthy that the country has since embarked on investigating the potential use of stablecoins as a means to bypass economic sanctions. This series of events illustrates the evolving and dynamic nature of Russia’s approach to the digital asset landscape.
Final Thoughts
Russian lawmakers have abandoned plans for a state-owned cryptocurrency exchange and will instead focus on establishing regulations for existing enterprises. This shift aims to address vulnerability to potential Western sanctions. The landscape may witness the emergence of new organizations, while authorities will introduce fresh regulations to address cross-border settlements and potential sanction circumvention.
Ken Emmanuel is a Blockchain Content writer, a Web3 Enthusiast and a Social Media Management Strategist, he likes writing educative contents to help people gain more knowledge and get inspired. The growth of any organization he work with is always his priority. He is a Geographer by profession and loves reading.
