Russian crypto advocates urge Putin to end regulatory hostility
As Russia continues to delay the introduction of cryptocurrency regulations, local advocates have appealed to Russian President Vladimir Putin to change the government’s approach to regulating the market.
The Russian Association of Crypto Industry and Blockchain (RACIB) – a large group of crypto and blockchain enthusiasts in Russia – issued an open letter to Putin on March 6, urging the president to address the risks of ignoring the global development of the crypto industry.
In the letter, RACIB argued that Russia has been too slow to implement experimental legal regimes aimed at crypto adoption despite enforcing its first crypto law, “On Digital Financial Assets”, in 2021.
In November 2022, lawmakers in Russia introduced a series of legal changes to the crypto law, proposing to launch a “national cryptocurrency exchange.” According to RACIB, some of these changes will significantly complicate the implementation of digital financial technologies in Russia as they introduce criminal sanctions for local blockchain developers.
The proposed changes will give Russian enforcement authorities a “sea of choice” to pressure the local crypto community, RACIB CEO Alexander Brazhnikov told Cointelegraph.
“It will not be easy for companies in the digital asset industry to prove that they are doing everything within the framework of Russian legislation,” Brazhnikov said.
RACIB has ultimately called on Putin to put an end to Russia’s hostile regulatory stance on crypto, as it prevents local businesses from fully exploiting the potential of crypto and would potentially cause the country to suffer “direct economic losses.” RACIB stated:
“The existing state policy around the regulation of digital financial assets creates serious risks of the Russian economy lagging behind not only unfriendly but also friendly countries due to delaying the adoption of new financial technologies.”
According to RACIB, one of the biggest risks behind ignoring the benefits of the crypto industry is the movement of local talent to advanced jurisdictions, including Eurasian Economic Union (EAEU) countries such as Kazakhstan and Armenia.
To help Russia change its tough regulatory stance on crypto, RACIB has asked Putin to build a working group, including representatives of the digital asset community, to work with the government on building the state’s crypto regulatory policy. The group has specifically expressed interest in developing and deploying cross-border payment systems in Russia, EAEU jurisdictions, as well as other countries such as Brazil, India, China and South Africa.
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In 2021, RACIB’s Yury Pripachkin claimed that Russia was doing “absolutely nothing” to regulate the local cryptocurrency market.
The news comes shortly after the Russian central bank reiterated its uncompromising stance on crypto, with Elizaveta Danilova, head of the Bank of Russia’s financial stability department, arguing that legalizing crypto investments threatens the welfare of Russian citizens. At the same time, the Bank of Russia sees no problem with legalizing crypto mining and allowing the use of crypto in cross-border transactions.
