Russia Shifts from State-Owned Crypto Exchange to Private Sector Regulations: Pros, Cons & Conflicts

Dall-E, create an image of a Russian government official shaking hands with a private crypto exchange entrepreneur, Moscow skyline in the background, warm and inviting atmosphere, golden-hour lighting, blending traditional and modern architecture, reflecting change and collaboration, heightened by a sense of cautious optimism. Mood: responsible progress.

Russian lawmakers have abandoned plans for a state-owned cryptocurrency exchange, choosing instead to establish regulations for existing enterprises, according to a Russian news outlet. This change in direction was highlighted by Colin Wu of Wu Blockchain, who shared the translated story from a Russian news outlet, revealing the country’s new focus on allowing private companies to develop crypto exchanges.

Ivan Chebeskov, Director of the Financial Policy Department of the Ministry of Finance for the Russian Federation, explained that the ministry did not support the establishment of a national crypto-exchange. Instead, they intend to “legally regulate the possibility of creating such sites by business.” Anatoly Aksakov, head of the Russian lower house committee on financial markets, shared that the new plan is to establish rules for the establishment and operation of crypto exchanges.

Aksakov also mentioned that these platforms will be permitted to facilitate cross-border payments, without specifying which ones. He acknowledged that there would likely be new restrictions imposed. The Central Bank will “probably” regulate the work of these platforms and manage international settlements within the country’s regulatory framework.

Private crypto operators within the Russian Federation have welcomed this news, as it offers opportunities for minimizing the risks of sanctions, cyber attacks on infrastructure, and eliminating potential market monopolies. Oleg Ogienko of BitRiver, a cryptocurrency mining operation in Russia, told the Russian news outlet that this would allow for more competitive and innovative companies to develop.

Russia’s decision to shift its focus away from a state-owned cryptocurrency exchange is understandable, considering the country ranks #137 of 180 on the 2022 Global Corruptions Index, indicating a need for caution regarding their state-controlled operations.

Authorities in Russia have had an inconsistent approach to digital assets for years. For instance, the Bank of Russia proposed an outright ban on crypto payments last year, only for the Ministry of Finance to submit a proposal on Bitcoin regulations shortly thereafter. Vladimir Putin later signed a law to outlaw payments in digital assets, but the country continued to investigate stablecoins as a means of bypassing sanctions.

The latest news comes amid ongoing financial sanctions against Russia led by Western countries, following its invasion of Ukraine. Despite past mixed signals, this development could potentially signify a new chapter in the Russian government’s relationship with cryptocurrencies, by taking a more open approach to private sector involvement in the digital asset space.

Source: Decrypt

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