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Russia Abandons National Crypto Exchange in Favor of Regulation

Key Takeaways
  • Russia cancels plans for a national cryptocurrency exchange and focuses on regulating the crypto industry and supporting existing exchanges.
  • Cryptocurrencies could soon be legally recognized as money in Russia, with draft legislation under consideration.
  • Compliance and cross-border transactions are key concerns for Russian authorities, who aim to reduce risks and promote competition in the crypto market.
30-May-2023 By: Aditi Tiwari
Russia Abandons Nati

Russia has decided not to go ahead with its plan for a national cryptocurrency exchange. 

Instead, the government will focus on regulating the crypto industry and supporting existing exchanges. There is also a possibility that cryptocurrencies could soon be legally recognized as money in Russia.

According to reports, Russia has canceled its planned national cryptocurrency exchange. This decision comes as a result of the sanctions imposed on Russia due to its involvement in Ukraine.

Now, the government's attention turns to regulating the crypto industry and assisting existing exchanges. Anatoly Aksakov, a member of the National Banking Council, explained that the goal is to facilitate cross-border transactions for businesses. Some restrictions may be imposed on exchanges, while new organizations may emerge. The Ministry of Finance agrees with this approach, believing it will reduce risks from sanctions and cyber attacks and promote competition.

Ensuring compliance is a top priority for Russian authorities. Lawmakers are hesitant to launch a national exchange without clear rules in place. Initially, the crypto exchange was planned to launch in June 2023, but it is now uncertain if it will happen at all or if there will be significant delays.

Instead of pursuing its own exchange, Russia now aims to create a regulatory framework to support existing crypto exchanges. The focus is on enabling these exchanges to facilitate cross-border transactions.

Russia's Ministry of Finance Backs New Approach, Considers Legalizing Cryptocurrencies

The Ministry of Finance supports this new strategy, which deviates from the previous plan for a national exchange. Details about the specific crypto regulations are limited, but Russia has been taking broader steps to regulate the crypto market.

In a notable shift, Russia is considering recognizing cryptocurrencies as legal tender. There is ongoing consideration of draft legislation to legitimize cryptocurrencies as money. This is a change from President Putin's ban on digital payments in July 2022. If approved, Russia would join other countries like El Salvador and the Central African Republic in officially recognizing cryptocurrencies as money.

Despite the ban on digital payments, the crypto industry continues to thrive in Russia, and the country ranks as the second-largest cryptocurrency miner globally.

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