Russia has, for more than five centuries, been symbolized by a bear. The reasons are many, but the country is continuing to show its bearish attitude even today. While it continues to postpone the introduction of cryptocurrency regulations, despite an order from President Vladimir Putin to develop a framework this summer, the country is most likely not going to legalize digital currencies anytime in the near — and possibly distant — future.
Late last week, Russian lawmakers and financial experts got together to discuss crypto regulations. The meeting was hosted by the Parliamentary Gazette, an editorial periodical that is managed by the country’s Federal Assembly. According to the newspaper, “Introduction to the Russian financial system of digital currency is not a question of tomorrow, but, most likely, of a distant future. Firstly, the issuance of other money, except for the ruble, is prohibited by the Constitution, and secondly, the regulators are confused by the ambiguity of the origin of crypto money and their equally dark way of transition from hand to hand.”
The Gazette’s reference to the “dark way” is a hint at the often-cited prevalence of criminal activity associated with crypto. However, as has already been proven by a number of sources — including Russia’s central bank — criminals use fiat exponentially more times than they do digital currencies.
The newspaper points out that the general consensus of the legislators is that regulation is needed, if for no other reason than to allow for FinTech innovation in the country. It further shows examples of how complicated creating regulations can be, stating, “In the U.S., the [exchange] of the ‘crypto’ is prohibited, but in China it is limited — that is, you can change, but without the right to withdraw outside the country. The most fully-fledged digital money market is currently regulated only in Switzerland and Japan, where the ‘crypto’ is equated to ordinary currencies.”
The fact that several countries have already introduced crypto regulations shows that, while possibly difficult, it is not impossible to create a necessary legal framework.
However, Russia wants to take a “wait-and-see” approach. According to Senator Lyidmila Bokova, the First Deputy Chairman of the Committee on Constitutional Legislation and State Construction, “I consider it [important] not to force the process, but to analyze the experience of larger economies. See how regulation takes place among them and what benefits or harm a country receives from the introduction of this regulation.”
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