Russia will impose severe limitations on the widespread use of digital assets like Bitcoin as of September 1. It will only accept digital financial assets issued within its borders.
This project is being led by Anatoly Aksakov, the Chairman of the State Duma Committee on the Financial Market. It is a component of a larger government initiative to regulate the cryptocurrency market in the face of escalating geopolitical unrest.
Why Does Russia Want to Ban Cryptocurrency?
According to Aksakov, the new law intends to impose limitations on non-Russian cryptocurrency businesses in order to strengthen the ruble's hegemony.
"Digital currency and financial assets issued under Russian law are permitted. Restrictions are necessary since, in the modern world, cryptocurrencies have replaced the ruble as the nation's quasi-currency. However, this decision has been made because only the Russian ruble satisfies the purpose of the currency. There will be limitations starting on September 1st," Aksakov clarified.
Within an experimental legislative framework, the measure will make allowances for cryptocurrency miners and Central Bank-sponsored test programs. This is due to the fact that cryptocurrency mining greatly increases Russian tax income. For foreign trade settlements, cryptocurrency miners generate about $2.59 billion in liquidity.
State Duma member Anton Gorelkin underlined, meanwhile, that Russia does not plan to outright forbid cryptocurrencies. Limitations will have an impact on the establishment of cryptocurrency exchanges and other platforms that offer services related to cryptocurrency exchange.
"Naturally, there won't be a ban on the use of cryptocurrencies. The prohibition will apply to the establishment of exchanges outside the boundaries of the experimental legal framework," according to Gorelkin.
Concurrently, this strategy is the subject of a heated internal discussion among Russian policymakers. The significance of certain regulations was emphasized by Artem Kiryanov, the Deputy Chairman of the State Duma Committee on Economic Policy.
"The digital code, which would clearly spell out the conceptual apparatus and common judicial law enforcement practice, should prescribe the regulation of cryptocurrency," Kiryanov stated.
Russia's Finance Minister, Anton Siluanov, has advocated for a more moderate approach in opposition to these constrictive viewpoints. Earlier in the year, Siluanov argued against outright banning cryptocurrencies and in favor of regulation that would allow for their usage in both local and foreign transactions.
"I have no doubt that we will reach a consensus with the Central Bank. We've been talking about this for a few years now. We are unable to ban the use of cryptocurrencies. Consequently, we must control this channel. We'll figure something out, I'm confident," Siluanov said.
These conversations allude to a possible trend toward the use of cryptocurrencies for out-of-country payments, demonstrating a greater comprehension of their possible function in international finance. Elvira Nabiullina, the head of the Bank of Russia, concurs with this strategy and is in favor of the trial usage of cryptocurrencies in international settlements.
April 2024, Cryptoniteuae