More development on crypto in Russia
A key question facing politicians is how to regulate crypto. Due to its decentralized nature, cryptocurrency does not fall under the jurisdiction of any country or regulatory body. This presents a challenge for legislation, as there is no existing framework to control cryptocurrency. Some have suggested that cryptocurrency should be regulated in the same way as other financial assets, such as stocks and bonds. Others have proposed more creative solutions, such as creating a new class of assets specifically for cryptocurrency.
We assume that this post on Cointelegraph does not surprise any readers, especially since we just commented a couple of days back on a previous article about the same. In this case, Russia’s central bank (Bank of Russia) now says that legalization of crypto is inevitable. We are not deep into the Russian legal system, but one would assume that legislation of some form is required first, but it may be that the BoR has the authority to declare crypto legal under the Russian system.
“The Bank of Russia, the country’s central bank, has reportedly admitted that cross-border payments in crypto are inevitable under the current geopolitical conditions… The Russian Central Bank has reconsidered its approach to regulating crypto and agreed with the Ministry of Finance to legalize crypto for cross-border payments, reported the local news agency TASS on Monday… Deputy Finance Minister Alexei Moiseev reportedly said that the Bank of Russia and the Ministry of Finance expect to legitimize cross-border payments in crypto soon.’
The catch here is that the use case being legitimized only has to do with foreign payments, while domestic crypto is still not made for prime time. One can of course see the clear reason for this logic, given that Russia is partially sanctioned by various countries and payment networks, resulting in limited access to cross-border payment options. We assume that domestic crypto payments will also come, but Russia will first build its own infrastructure, similar to their attempt to create the Mir credit card.
“Russian lawmakers have historically been opposed to the idea of using cryptocurrencies as a payment method. In 2020, Russia passed a major crypto law, “On Digital Financial Assets”, which officially banned the use of cryptocurrencies such as Bitcoin (BTC) for payment purposes. The Bank of Russia has been skeptical of the idea of cryptocurrency payments because it wanted to protect the Russian ruble as the only legal tender in the country… The idea of crypto payments for national transactions in Russia emerged in late 2021. Then, Russian President Vladimir Putin said it was still too early to use crypto for trading energy resources such as oil and gas.’
Overview after Steve Murphydirector, commercial and corporate payment advisory service at Mercator Advisory Group.
