Regulation
Russia Moves to Legalize Cryptocurrency Use in International Payments: Here’s Why
Russia Moves to Legalize Use of Cryptocurrencies in International Payments
According to the latest reports, Russia is now accelerating its regulatory efforts on the use of cryptocurrencies, a move that comes against a backdrop of growing international sanctionsthat are impacting business operations and financial transactions. This comes as Bloomberg reported Earlier today the Russian government was working on legislation that could make digital currencies a vital component of bypassing these financial barriers, marking a significant policy shift from previous restrictions.
Details of cryptocurrency legalization
The State Duma, the lower house of the Russian parliament, is expected to develop cryptocurrency bills in its upcoming sessions. These include both general regulation of digital currencies and specific measures regarding cryptocurrency mining. Additionally, the bills, which are expected to quickly go through the legislative process, are expected to be promulgated by President Vladimir Putin. Put in by September 1st.
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It is worth noting that this rapid progress in digital currency legislation highlights a notable shift in Russia’s approach from skepticism to tentative acceptance as a necessity driven by geopolitical pressures. Furthermore, the push for cryptocurrency adoption is particularly noteworthy as it follows the increased difficulties faced by Russian companies in conducting international transactions due to extensive U.S. sanctions related to the ongoing conflict in Ukraine.
The Russian Central Bank had recently proposed a total ban on cryptocurrenciesciting risks to financial stability. However, recent global and domestic developments have necessitated a reassessment of this position.
Anatoly Aksakov, Chairman of the Duma Committee on Financial Market, noted:
Previously, there were fears that legalizing cryptocurrencies could create problems for the development of the domestic market. While cryptocurrencies could help Russia evade Western sanctions, their use is “an objective phenomenon and cannot be ignored.”
In particular, the legislative change is also seen as a response to President Putin’s call for the country to “not miss the moment” to regulate and Integrate digital financial activities inside and outside Russia, according to Bloomberg.
How would the regulation be managed?
Aksakov, speaking about how cryptocurrency regulation will be handled, revealed that digital currency transactions, once legalized, will receive a structured framework that will bring them into line with foreign exchange regulations in force in Russia.
This would potentially open up new avenues for both large and small businesses. Aksakov added:
Companies involved in the cryptocurrency and mining industry have been pushing hard for the law to come forward to ensure that they can operate within normal legal regulations and not fear official investigations.
The report also revealed that the immediate beneficiaries are likely to be large exporters able to meet the stringent conditions set by the new regulation.
Additionally, the Central Bank of Russia would play a role in supervising these transitions, while other federal agencies would be involved in monitoring and controlling the circulation of legalized digital currencies.
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