Russia could legalize cryptocurrency as a legal money operator, as the traders are keen on working in the legal space.
Russia is considering legalizing cryptocurrency as a legal tender, subject to rigorous controls, this is because the use of digital assets is growing rapidly in the country, and cryptocurrency traders are ardent to operate in a legal space.
Anatoly Aksakov, head of the State Duma Committee on Financial Markets, said that cryptocurrency could be used in foreign trade, the RT reported. He also noted that foreign banks are sometimes hesitant to interact with Russian cryptocurrency traders, which is why legalization would be beneficial.
The Russian government is still working out to extract the details of how cryptocurrency would be governed if it were to be legalized. However, Aksakov said that the government is committed to creating a “friendly” environment for cryptocurrency businesses.
The legalization of cryptocurrency in Russia would be an eloquent development. It would make it easier for Russians to use and trade cryptocurrency, and it could also help to attract foreign investment in the country’s cryptocurrency sector.
Further, Aksakov, said that digital currencies could be used in foreign trade transactions. He also said that it is necessary to control the movement of digital currencies to avoid irregularities. The use of digital currencies is limited in Russia due to antagonistic legislation. In 2020, President Vladimir Putin signed a law on digital financial assets that legalized cryptocurrencies but banned their use for goods and services.
Aksakov’s comments suggest that the Russian government is considering loosening restrictions on the use of digital currencies. However, it is still unclear how the government would regulate the use of digital currencies in foreign trade transactions.
Russia’s Finance Ministry has recently highlighted the benefits of digital currencies in foreign trade, such as the lack of correspondent accounts, instant transactions, and minimal compliance procedures.
According to Bitriver, Russia became the world’s second-largest cryptocurrency mining country in 2022.
However, there are no uniform international laws governing cryptocurrencies, which are known for their high volatility. Bitcoin, the most popular cryptocurrency, was worth a fraction of a cent when it was first released in 2009, but it surged to nearly $69,000 per coin in November 2021. The price of Bitcoin is currently over $30,000.
Cryptocurrencies would be classified as “digital financial assets” and would be subject to the same regulations as other financial assets. Cryptocurrency exchanges would be required to register with the government and would be subject to oversight by the Central Bank of Russia. Individuals and businesses would be allowed to hold and trade cryptocurrency, but they would not be able to use it as legal tender. The proposed regulation of cryptocurrency in Russia is still in its early stages, but it is a sign that the government is taking a more positive approach to this emerging technology.
(Harshita is pursuing a post-graduation in International Relations. She has an undergraduate degree in Global Affairs with a specialization in social sciences and humanities. She is a certified French speaker. Opinions expressed are the author’s own.)
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Saisha Kamla Dudha