3 - 5 minute read
The Bank of Russia’s latest move towards pushing the crypto market is the introduction of an “experimental legal regime” for cryptocurrencies. This regime, as announced by the regulator’s head, Elvira Naiullina, will be used exclusively in export-import deals. However, it should be noted that crypto trading and payments inside Russia will remain banned, Naiullina added.
This article highlights the efforts of the Russian government to regulate the cryptocurrency market and legitimize the use of digital assets for cross-border trade deals within the country. The article also sheds light on the introduction of a new tax code for miners as part of the regulation.
According to local newspaper Vedomosti, the Russian government is working on a bill to create a national agency that will license and supervise cryptocurrency platforms operating in Russia. The bill also proposes the introduction of a new tax code for crypto miners as part of the regulation.
The country’s central bank plans to create special organizations appointed with mining crypto and processing payments exclusively for cross-border trade deals. The deputy of the regulator, Alexey Guznov, stated that the Bank of Russia is presently in discussions with the government to define the type of organizations that are eligible to participate in the experiment, their business models, and the banks they will use.
BitRiver, one of Russia’s largest mining companies, had previously partnered with the state-affiliated oil company Gazpromneft. Digital assets produced under Russian law can also be used for cross-border deals, in the same way as global decentralized cryptocurrencies, according to Nabiullina.
At present, it is anticipated that government-affiliated businesses will participate in the trial. According to a report by TASS, the Bank of Russia and the Ministry of Finance have agreed that Russia cannot avoid implementing cryptocurrency payments due to the international sanctions imposed on the country.
The introduction of an experimental legal regime for cryptocurrencies exclusively for export-import deals indicates the Russian government’s desire to legitimize digital assets as a legitimate means of transaction. This development could open up new opportunities for the crypto market in Russia, extending its use in the country’s business sector.
However, the government’s stringent regulations on domestic crypto trading and payment deal a harsh blow to the market, limiting its growth and expansion in the country. It is worth noting that this new experimental regime is the first positive development for the crypto market in Russia since digital payments were banned in the country back in 2020.
The new development in the Russian crypto market presents some potential opportunities for traders. In particular, traders can explore the use of cryptocurrencies for cross-border trade deals.
On the other hand, the government’s ban on crypto trading and payment inside Russia poses significant risks for traders. It’s advisable that traders watch closely and adapt to new developments in the Russian crypto market. It’s also crucial that traders be aware of any regulations from the government that could affect their investments in the crypto market.
The Bottom Line
The announcement from Russia’s Bank of Russia regarding the experimental legal regime for cryptocurrencies utilized in export-import deals is a significant development in the country’s crypto market. This development presents opportunities for traders and could legitimize the use of digital assets for transactions within the country.
However, traders must take into account the government’s stringent regulations on crypto trading and payment inside Russia, limiting the market’s expansion within the country. Traders must pay attention to upcoming regulatory changes from the government and adapt their investments accordingly.