In a surprising turn of events, Russian lawmakers have scrapped their plans to establish a state-owned cryptocurrency exchange. Instead, they have decided to concentrate on creating a regulatory framework for existing crypto enterprises, according to a report by a Russian news outlet. Wu Blockchain on Twitter revealed that private companies could build and operate crypto exchanges.
Ivan Chebeskov, the Director of the Financial Policy Department of the Russian Federation’s Ministry of Finance, stated, “The Ministry did not support the establishment of one national crypto-exchange.” The new approach aims to regulate private business exchange platform establishment legally. Anatoly Aksakov, the head of the Russian lower house committee on financial markets, explained that the plan is to establish rules for operating these infrastructures instead of creating a single national exchange.
While details about the specific exchanges that will be allowed to facilitate cross-border payments remain undisclosed, Aksakov acknowledged that these platforms are likely to face new restrictions.
Izvestia, the Russian news outlet that published the story, reported that the Central Bank would likely assume the responsibility of regulating these platforms and overseeing international settlements within the country’s regulatory framework.
Crypto Operators In Russia Applaud Regulatory Focus
Several private crypto operators in Russia have been enthusiastic about the news. Oleg Ogienko, representing BitRiver, a cryptocurrency mining operation in the country, expressed his support, stating, “This will help minimize the risks of sanctions and cyber attacks on infrastructure and eliminate possible market monopolies.” Ivan Gostev, the commercial director for GIS Mining, echoed this sentiment, emphasizing that the new approach will foster the development of more competitive and innovative companies.
The positive reaction from the private sector is not unexpected, given Russia’s ranking of #137 out of 180 countries on the 2022 Global Corruption Index. This ranking indicates the need for caution when embarking on state-led initiatives. Russian authorities have been hesitating on their stance toward digital assets for years. Last year, the Bank of Russia proposed a complete ban on crypto payments, while the Ministry of Finance submitted a Bitcoin regulatory proposal a month later. Subsequently, Vladimir Putin signed a law banning payments in digital assets, only to later explore stablecoins to circumvent sanctions.
Today’s announcement comes when Russia faces ongoing financial sanctions imposed by Western nations following its invasion of Ukraine. Despite the history of mixed signals, this development potentially signifies a new chapter in the Russian government’s approach to cryptocurrencies.
The decision to shift from a state-owned exchange to regulate existing crypto enterprises marks a significant change in the Russian government’s strategy. Russia aims to balance innovation and oversight by allowing private companies to operate exchanges. The Central Bank is likely to assume regulatory responsibilities. This approach could provide greater stability and promote competition in the crypto sector.
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