Lawmakers in Russia are contemplating a regulatory framework for the crypto organizations after the government reportedly ditched plans to launch a national exchange.
Plans for a state-run crypto exchange first surfaced in November 2022 with backing from the Ministry of Finance and the Central Bank of Russia, Cointelegraph reported at the time.
In what has been described as a win for crypto in Russia, the sudden turnaround would see lawmakers concentrate on creating guidelines for private companies.
Colin Wu of Wu Blockchain, who broke the news on Monday, cited a translated Russian media platform, Izvestia, which said that the country will be focusing “on developing rules that would allow private companies to set up such trading platforms.”
Russian lawmakers have said they will no longer move forward with plans to create a state-level cryptocurrency trading platform. Focus on developing rules that would allow private companies to set up such trading platforms, overseen by Russia’s central bank, which is set to…
— Wu Blockchain (@WuBlockchain) May 29, 2023
As the Russian news outlet reported, Ivan Chebeskov, who serves as the Director of the Financial Policy Department at Russia’s Ministry of Finance, stated that the Ministry does not endorse the creation of a single national cryptocurrency exchange.
Rather, the intention is to “legally regulate the possibility of creating such sites by businesses.”
The decision was reinforced by Russia’s lower house (Duma) committee on financial markets. Anatoly Aksakov said, “Instead of creating one national crypto exchange, it is planned to establish rules for the establishment and operation of such infrastructures.”
Crypto exchanges operating under the new regime would be allowed to carry out cross-border payments, according to Aksakov. However, the Russian official did not mention which services they would be allowed offer only that crypto exchange platforms should anticipate strict rules.
Russia Central Bank To Oversee Crypto Exchanges
The new regulations are likely to fall under the mandate of Russia’s central bank, according to Aksakov. Moreover, they will form part of the bill on experimental legal regimes.
It is plausible that crypto exchanges in Russia will not operate as normal platforms like Binance and Coinbase do. Instead, they could play the middle man between domestic and international importers and exporters—as they facilitate cross-border payments, at least according to remarks by the central bank deputy governor Alexey Guznov. The organizations will, for example, assist Russian businesses to pay for parallel imports.
Prominent crypto companies in Russia had vehemently opposed the idea of a national crypto exchange. They were of the opinion that the government regulates dedicated private organizations.
BitRiver’s Oleg Ogienko, a representative of a Russian cryptocurrency mining operation told Izvestia that the move to regulate organizations will greatly reduce the likelihood of sanctions, and cyber threats to infrastructure, and prevent potential market monopolies.
Echoing this sentiment, Ivan Gostev, Commercial Director for GIS Mining, said that the initiative will facilitate the growth and advancement of competitive and inventive businesses.
Russian state agencies have over the years excelled at their ‘love-hate’ relationship with crypto. The central bank had hinted at a blanket ban on crypto early last year but shocked the world when the Ministry of Finance turned in a draft for Bitcoin guidelines a month later.
The drama continued with President Vladimir Putin, signing into law a bill that outlawed crypto payments in Russia.
Amid the sanctions from the West due to the invasion of Ukraine, state agencies started exploring the use of stablecoins.
The decision to regulate crypto exchange organizations could see Russia circumvent most of the sanctions in place and allow companies to freely trade in international markets.
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