Russia Shifts Stance on Cryptocurrency: State-Run Exchange Plans Scrapped in Favor of Regulation

In a surprising development, Russian lawmakers have decided to abandon their plans of creating a state-owned cryptocurrency exchange. Instead, they are now focusing on establishing regulations and guidelines for existing private enterprises operating in the cryptocurrency space, as reported by a Russian news outlet on Sunday.

The news was initially shared by Colin Wu of Wu Blockchain on Twitter, who provided a translation of the Russian report. According to the news outlet, Ivan Chebeskov, Director of the Financial Policy Department of the Russian Ministry of Finance, stated that the Ministry did not support the idea of establishing a national crypto-exchange. The new approach will involve legally regulating the creation of such platforms by private businesses.

Russia Plans to Regulate Crypto Infrastructures and Encourage Innovation

Anatoly Aksakov, the head of the Russian lower house committee on financial markets, explained that instead of a single national exchange, the government plans to develop rules governing the establishment and operation of crypto infrastructures. Although Aksakov did not specify which crypto exchanges would be allowed to facilitate cross-border payments, he acknowledged that these platforms would likely face new restrictions.

Izvestia, the Russian news outlet that broke the story, reported that the Central Bank is expected to regulate the operations of these platforms, ensuring compliance within the country’s regulatory framework. Furthermore, the Central Bank will oversee international settlements within the established regulations.

The private cryptocurrency operators within Russia have responded positively to this shift in approach. Oleg Ogienko from BitRiver, a Russian cryptocurrency mining operation, expressed,

“The new direction would help minimize risks such as sanctions and cyber attacks, while also preventing market monopolies.”

Ivan Gostev, the commercial director for GIS Mining, added that this change would foster competition and innovation among cryptocurrency companies.

Private Sector Embraces Crypto Amidst Russia’s Corruption Woes

The positive response from the private sector comes as no surprise, given that Russia ranks #137 out of 180 countries on the 2022 Global Corruption Index. This indicates the need for caution when undertaking state-controlled endeavors in the cryptocurrency industry.

Over the years, Russian authorities have exhibited mixed signals regarding their stance on digital assets. In early 2022, the Bank of Russia proposed a complete ban on crypto payments, followed by a proposal from the Ministry of Finance to regulate Bitcoin. Later on, President Vladimir Putin signed a law to prohibit digital asset payments. However, the country has also explored stablecoins as a potential means to bypass financial sanctions.

Today’s announcement comes at a time when Russia is facing ongoing financial sanctions imposed by Western countries following its invasion of Ukraine. While the Russian government’s relationship with cryptocurrencies has been marked by uncertainty, this recent decision signifies a potential new chapter, indicating a greater willingness to collaborate with the cryptocurrency industry.

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