Bank of Russia Opposes Domestic Use of Cryptocurrency, Encourages International Trade
In the realm of cryptocurrency, Russia’s Central Bank has taken a stand against the domestic usage of digital assets, preferring to reserve their use for international business transactions. The Bank of Russia is prepared to evaluate the possibility of legalizing cryptocurrency within the nation but only as part of a legal experiment.
Governor Elvira Nabiullina made this announcement during a news conference held by the Bank of Russia on December 16. She stated that it is feasible to consider transactions made via an authorized organization within Russia as part of an experimental legal regime. However, in order to proceed with this, a corresponding law is required.
Nabiullina acknowledged that the central bank’s primary concern with cryptocurrency is its inability to be used as a payment mechanism. She emphasized that the central bank is particularly worried about the security of investors due to the highly volatile nature of the cryptocurrency market.
According to Alexey Zabotkin, deputy governor of the Bank of Russia, the widespread adoption of cryptocurrencies will inevitably lead to their use as a payment method. While Russia does not formally prohibit its citizens from investing in cryptocurrencies, the Bank of Russia does believe that this will eventually occur.
If the proposed experimental regime is accepted, Zabotkin emphasized that its purpose would be to encourage the use of cryptocurrencies within Russia, but only to assist with international commerce.
It is important to note that Russia’s primary crypto regulation, known as the Law On Digital Financial Assets, legally prohibits the usage of cryptocurrencies like Bitcoin for payment purposes within the country. This law came into effect in 2020.
Although the law does not prohibit Russian citizens from investing in cryptocurrencies, local cryptocurrency exchanges are not yet regulated.
While the Russian government is not prepared to provide its citizens access to decentralized financial instruments like Bitcoin within their own country, it recognizes the opportunities presented by decentralization on a global scale. In November, President Vladimir Putin condemned the monopoly that exists in the world’s various financial payment systems and called for the establishment of a decentralized, blockchain-based settlement network.
The Bank of Russia opposes the domestic usage of cryptocurrency but encourages its use in international trade. While cryptocurrency is not yet legally accepted in Russia, the government is open to the possibility of experimentation and recognizes the potential for decentralized financial instruments on a global scale.
