Russia to Create a State Crypto Exchange: Monopoly in Sight?

Russia to Create a State Crypto Exchange: Monopoly in Sight?

  • The Russian parliament (State Duma) is working on a draft amendment to the Digital Financial Assets Law for the creation of a digital asset trading platform.
  • The legislative reform will ratify the government’s measure to prohibit the use of cryptocurrencies as a means of payment.

Russia’s State Duma will discuss a reform to the country’s Digital Financial Assets Law that includes the creation of a state-owned crypto exchange. It also ratifies a ban on Bitcoin and other cryptocurrencies as a means of payment.

The amendments to the law regulating cryptocurrency trading operations are contained in a draft. It will soon be discussed by the Russian parliament. If approved, it would be sent to the central bank and the government, according to a report by local media Vedomosti.

Additionally, Russian lawmakers have held talks with representatives of major companies linked to decentralized finance. The purpose of these talks was to discuss the “necessary changes” to the legislation.

State Control of the Market

"It makes no sense to say that cryptocurrencies don't exist, but the problem is that they circulate in a big stream outside of government regulation," said Sergey Altukhov, a member of the Duma's Economic Policy Committee representing the ruling United Russia party.

He added that the country loses billions of rubles in state revenue due to the lack of proper tax legislation imposing duties on cryptocurrency trading.

According to the Russian legislator, “it’s necessary to create conditions” for the legalization of the Bitcoin ecosystem in Russia. He also said it was time to “adjust the rules of the game”, without contradicting the positions of the Central Bank and the government on this issue.

The head of the Duma Committee on Financial Markets, Anatoly Aksakov, suggested in July the launch of a national crypto platform integrated into the Moscow Stock Exchange. The institution presented in September a bill that allows the trading of crypto assets in that market.

Aksakov hopes that the digital asset market will be legalized in the country through strict regulation.

“We need the mandatory identification of the participants, prove their certifications and carry out work only through platforms and operators included in the registry of the Central Bank,” Aksakov noted.

On the Flipside

  • The Central Bank of Russia is skeptical about the benefits of cryptocurrencies. It proposed a ban at the beginning of the year but moderated its position after the invasion of Ukraine.
  • Alternatively, the Russian issuer is working fast on the development of its CBDC, the digital ruble.

Why You Should Care

Cryptocurrencies can only be used for cross-border payments, as their use within the country is prohibited. If the amendments to the Digital Financial Assets Law are finally approved, the Russian government would monopolize cryptocurrency operations within the country.

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