With sanctions cutting Russia off from global finances, Moscow’s motivation to establish a domestic market infrastructure for digital assets is growing, a top official at Russia’s finance ministry has noted. The comment comes as Russians are losing access to foreign crypto platforms.
Russia recognizes need for local crypto asset market
As international sanctions over Ukraine’s invasion expand, Russia has turned its attention to cryptocurrencies, while concerns are growing in the West that the country may be using them to circumvent financial restrictions. The fines have also impacted the crypto space, with Russians finding it harder to cash in their digital assets.
Incentives to build Russia’s infrastructure for the cryptocurrency market have increased as sanctions have resulted in restrictions on foreign exchange for Russian citizens. The comment was made by Ivan Chebeskov, director of the Ministry of Finance’s Financial Policy Department, during the International Banking Day conference, Tass reported.
It has become very difficult for Russians who have invested in cryptocurrencies abroad to withdraw their money and convert it into fiat money, the senior official said. Russian citizenship is now concerned about foreign regulators, money being blocked and new bills denied, Chebeskov explained, stating:
Therefore, of course, the motivation for creating the Russian digital currency infrastructure becomes even greater.
A Russian crypto market would allow Russians to not only withdraw their assets, but also carry out other transactions. According to the Ministry of Finance, a growing number of them are willing to transfer their coins to Russia. Some trading platforms, for example the leading South Korean exchanges, already have limited access for Russian users.
The Russian crypto space remains only partially regulated with the “On Digital Financial Assets” law that came into effect in January 2021. Authorities in Moscow are still discussing the future of cryptocurrencies, with the Central Bank of Russia proposing a blanket ban, while most institutions support the Minfin’s proposal to legalize the industry under strict government control.
In February, the federal government approved a regulatory plan based on the ministry’s draft. Later that month, the department introduced a new “About Digital Currency” bill with comprehensive rules for the industry. The Treasury Department is also working to address crypto income tax aspects, Tass news agency added.
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Crypto, crypto assets, crypto exchanges, cryptocurrencies, cryptocurrency, legalization, market infrastructure, regulation, restrictions, russia, russian, russian citizens, russian users, sanctions, transactions, ukraine, ukrainian, withdrawals
Do you think Russia will soon take steps to create its own crypto market infrastructure? Share your expectations in the comments section below.
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “Being a writer is what I am, not what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
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