Russia Sets New Crypto Regulations

Russia Sets New Crypto Regulations

RegulationLaw

By Jakub Lazurek

29 Apr 2024 (2 months ago)

2 min read

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Russia will enforce strict crypto rules starting on September 1, sparing miners and central projects

Russia will implement severe crypto restrictions on September 1 but will make exceptions for miners and specific Central Bank projects. This initiative, led by Anatoly Aksakov of the State Duma’s Financial Market Committee, seeks to strengthen the ruble and manage the crypto sector amid increasing global tensions. The upcoming law will limit the use of cryptocurrencies to those issued within Russia, including digital rubles. Aksakov stated that this step is essential to preserve the ruble’s role as the main currency, as cryptocurrencies are currently substituting it in some economic sectors.

However, the legislation excludes crypto mining and Central Bank-related experimental projects from these restrictions due to their significant contribution to Russia’s tax income, which amounts to about $2.59 billion in liquidity for international trade. Anton Gorelkin, a State Duma member, explained that while creating crypto exchanges and transaction platforms outside of regulated areas would be banned, cryptocurrency circulation would not be stopped.

This aims to prevent unregulated exchanges but not to completely ban the use of digital currencies. Russia’s Finance Minister, Anton Siluanov, and Elvira Nabiullina, head of the Bank of Russia, support a moderate approach to regulate crypto use. They advocate for controlled use in domestic and international markets, hinting at a consensus in the making after prolonged discussions.

There have also been instances where Russian entities used cryptocurrencies like USDT to buy essential military technology components, bypassing traditional financial systems to avoid sanctions. This includes the purchase of drone parts critical for military operations in Ukraine, highlighting a strategic use of digital currencies to evade international scrutiny.

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