With sanctions cutting off Russia from global finance, Moscow’s motivation to establish a domestic market infrastructure for digital assets is growing, a senior Russian finance ministry official noted. The comment comes as Russians lose access to foreign crypto platforms.

Russia recognizes the need for a local crypto asset market

Amid growing international sanctions over the invasion of Ukraine, Russia has turned its attention to cryptocurrencies as concerns in the West grow that the country could use them to circumvent financial restrictions. Sanctions have also affected the crypto space, and Russians are finding it harder to cash out their digital assets.

Incentives to build Russian infrastructure for the cryptocurrency market have increased as sanctions have resulted in restrictions for Russian nationals on foreign exchange. The remark was made by Ivan Chebeskov, director of the Finance Ministry’s Financial Policy Department, at the International Banking Day conference, Tass reported.

It has become very difficult for Russians who have invested in cryptocurrencies abroad to withdraw their funds and convert them into fiat currency, the senior official pointed out. Russian citizenship now worries foreign regulators, money is blocked and new accounts are denied, Chebeskov explained and said:

Therefore, the motivation to create the Russian infrastructure for digital currencies of course becomes even greater.

A Russian crypto market would not only allow Russians to withdraw their assets, but also conduct other transactions. According to the Ministry of Finance, an increasing number of them are ready to transfer their coins to Russia. Some trading platforms, for example major South Korean exchanges, have already restricted access to Russian users.

The Russian crypto space is only partially regulated by the “On Digital Financial Assets” law which entered into force in January 2021. Moscow authorities are still discussing the future of cryptocurrencies, the Central Bank of Russia suggesting a blanket ban while most institutions support the MinfinThe proposal to legalize the industry under strict government control.

In February, the federal government approved a regulatory plan based on the department’s concept. Later that month, the department submitted a new bill “On Digital Currency” introducing comprehensive rules for the sector. The Ministry of Finance is also working to address the taxation aspects of crypto income, Tass news agency added.

Keywords in this story

Crypto, crypto assets, crypto exchanges, Cryptocurrencies, Cryptocurrency, legalization, market infrastructure, Regulation, restrictions, Russia, russian, Russian citizens, Russian users, Sanctions, transactions, Ukraine, ukrainian, Withdrawals

Do you think Russia will soon take steps to create its own crypto market infrastructure? Share your expectations in the comments section below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who loves Hitchens’ quote: “Being a writer is who I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image credits: Shutterstock, Pixabay, Wiki Commons

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