Russia’s monetary authority is now calling for the swift legalization of crypto exchange in the country under strict government control.
The regulation of platforms swapping Russian fiat for digital coins will curb money laundering and boost the use of cryptocurrencies in foreign trade, its management is convinced.
Russia’s central bank urging for crypto exchange legalization
Establishing a legal framework for cryptocurrency exchange and rules for the providers of related services has become a top priority of Russian authorities, according to Vladimir Chistyukhin, first deputy chairman of the Central Bank of Russia (CBR).
Speaking at a meeting of the Committee on Budget and Financial Markets at the Federation Council, the upper house of the Russian parliament, Chistyukhin stressed that this is necessary in order to eliminate money laundering and the financing of terrorism through crypto.
Quoted by the TASS news agency and the Russian business news portal RBC, he further opined that the move will help develop cryptocurrency payments for cross-border settlements.
Regulators and legislators in Moscow should introduce the rules for cryptocurrency exchange as quickly as possible, the deputy governor also emphasized, stating:
“Today, there are kiosks and exchange points where you can bring rubles, and a crypto transfer will be made. It seems to us that it’s the task of the government and the central bank to create legislation, as quickly as possible, that directly legalizes this and describes the rules for conducting operations so that no money laundering or terrorism financing pass through it.”
Chistyukhin suggested that the legalization of crypto exchange in Russia will spur the development of international settlements in cryptocurrencies as well, which have not seen the widespread implementation that Russian officials had hoped for.
Russia may be making a hard turn toward crypto
The Bank of Russia has been persistently opposed to allowing crypto payments in the country, maintaining that the Russian ruble, including its upcoming digital version, must remain the only legal tender, as is under current law.
However, under increasing pressure of Western sanctions over the war in Ukraine, which severely limit Russian access to traditional financial channels and global markets, it permitted the use of digital currencies like Bitcoin in foreign economic activities under an “experimental legal regime” (ELR).
Chistyukhin remarked that cross-border settlements in cryptocurrency within the ELR are not developing as actively as wanted. The CBR executive pointed to two main reasons for that.
First, he highlighted the effectiveness of other financial instruments, such as direct correspondent accounts, as an example. Then, he noted that crypto operations will remain a gray area even after the current restrictions are removed, if they are not comprehensively regulated.
Earlier this month, Russia’s Minister of Finance Anton Siluanov announced that his department and the central bank have agreed on the need to legalize the use of cryptocurrencies in foreign trade beyond the limitations of the existing ELR.
“We believe this area should be legalized and should be subject to legislative regulation,” the head of the Russian Treasury said last week. This will allow financial regulators to put the whole sector in order, Siluanov added, as quoted by the RIA Novosti news agency.
The ELR is only available to corporate entities and a small group of “highly qualified” investors, categorized as such based on income and previous investments, leaving ordinary Russian citizens with few legal options to touch crypto.
And there have been calls to limit their access even further, such as a recent proposal to criminalize crypto transactions, which sounds like a return to Soviet-era foreign currency restrictions, and an announcement that Moscow is preparing harsher penalties for people involved in illegal crypto circulation.