After a long battle over the country’s position on cryptocurrencies, different Russian state bodies have agreed on the best way to regulate the cryptocurrency sector.
The cryptocurrency trend has now reached the shores of Russia. The latest developments in the Russian economy show the possible chances of Russia moving forward towards accepting cryptocurrency by agreeing to regulate the cryptocurrency sector.
In an announcement on an official government page on Tuesday, February 8th, it is stated that cryptocurrencies, such as Bitcoin, should integrate Russia’s financial system but under supervision.
The government has determined the future of digital currencies in Russia. The turnover of such financial assets will be regulated by the state with strict obligations for all participants in the professional market and an emphasis on the protection of the rights of ordinary investors.Statement from Russian Intuitional bodies concerning cryptocurrencies acceptance
According to the document released by Russian officials, the goal of regulation is to incorporate the mechanism of digital currency circulation into the financial system and guarantee control over cash flows in the credit institution circuit.
It is also stated that it would impose a need on market players to notify individuals about the heightened dangers connected with digital currency.
This announcement is accompanied by a nine-page paper outlining criteria for various actors in the industry, including investors, exchanges, and P2P. However, although addressing mining, a significant business in the country, the text does not detail this subject.
In short, this is a step forward for the country, as the Central Bank engaged in the conversation. Previously, the Russian Central Bank had planned outright to prohibit the usage of Bitcoin in the nation.
Users or crypto buyers have to provide complete identification on these platforms before making any purchase in any cryptocurrency. These newly drafted regulations are expected to come into effect from the second half of 2022 or next year.
Russia can benefit from cryptocurrencies.
In addition to the usage of Digital Currencies such as Bitcoin, it is worth mentioning that Vladimir Putin, Russia’s president, has already been contacted about using cryptocurrencies instead of the dollar to sell oil other items.
Returning to the document published on Tuesday, February 8th, Russian entities point out that the main reason for this approval is to get cryptocurrencies out of this gray area of legislation.
Among the reasons is the growth in adoption. After all, according to the note, there are 12 million cryptocurrency users in the country related to 2 trillion rubles. In other words, this represents 7% of the capitalization of the entire cryptocurrency market.
As for mining, the sector that the Central Bank wanted to ban, the document points out that Russia is the third-largest Bitcoin-producing hub on the planet.
In other words, if Bitcoin becomes a worldwide standard, nothing beats having this production under its control and rules.
However, the document does not delve as deeply into this issue as it does into the others. So we can expect the government to release more news on the topic soon.
Other Nations In Support Of Cryptocurrency
Many nations worldwide are getting started with crypto and are adopting it in many ways into their financial systems.
Crypto offers an anonymous and decentralized platform to initiate transactions across the globe at low fees. By regulating crypto transactions, a country can boost its safe and better monetary system resolutions.
Some examples of the nation supporting crypto revaluation include:
- El Salvador- Recently, in January 2022, El Salvador became the first country to grant legal tender Bitcoin. It created a financial revolution across different nations and the government itself. The country aims at introducing bitcoins in its transaction system to promote the Country’s GDP. The Bitcoin city is also being created to introduce even more adoption of cryptocurrencies in the Country.
- Brazil, which is not as large as El Salvador and did not make crypto as a legal tender yet, but permits cryptocurrencies. The City of Rio de Janeiro for example, offers a massive discount of 10% for citizens looking to pay taxes in Bitcoins. This step is taken to ensure that country remains in compliance with the rising potential of the crypto network in leveling up the financial game.
· Iran – With the help of an integrated system, the central bank of Iran is looking to develop a modern agreement with the Middle East region. This agreement will allow CBI’s official platform to offer citizens a payment system for cryptocurrencies. In addition, officials from the Iranian government have also given positive signs that Iran will develop its primary cryptocurrency.
Under developing countries like India are still figuring out their way to involve with the crypto payment system. On the contrary, nations like Japan and Russia are making drastic moves towards achieving better financial stability with Bitcoin.
Along with this, Russia is also planning to go a step ahead by developing its blockchain policy. If all goes as planned, the crypto market will undergo a substantial transformation in the future.
If Russia can move over to a blockchain-based system, the world will follow it as Russia is the trendsetter for its followers. The change expected for the Russian economy is mostly positive, but the future will show what will come in cryptocurrency.
Changes in Russia after regulate the cryptocurrency sector?
Firstly, the Russian government will have greater control over cryptocurrency investors. So one of the measures is a tightening of the KYC system – identity verification procedure – so that the state continues to have a minimum of control over its citizens.
After all, such control will expand to banks responsible for verifying whether users can make withdrawals or deposits at exchanges.
In addition, exchanges will need to obtain a license to operate in Russia, which is common in other countries. Finally, companies registered abroad, so-called offshore, will not work in the country.
It is expected that the approval of this idea, which deems Bitcoin (and other Digital Currencies) to be legal, speeding legislative projects dealing with cryptocurrencies.
The principal ones are concerned with taxes on such operations as mining and those involved with utilizing cryptocurrencies for criminal purposes such as tax evasion and money laundering.
Finally, although the proposal sounds somewhat conservative, these points are common in countries that have already embraced cryptocurrencies and their adjacent technology.
As a result, it is a step forward for the sector, as there was prior thinking of prohibiting the use of cryptocurrencies.
Meanwhile, the largest Digital Currency, Bitcoin, is up modestly by 1.5 percent on Wednesday, February 9th, trading at $44,150 at the time of publication of this article, indicating that the cryptocurrency winter may be coming to an end.