Russia’s cryptocurrency industry is at risk of suffering “direct financial losses” due to the government’s regulatory hostility, according to the Russian Association of Crypto Industry and Blockchain (RACIB). In a letter addressed to President Vladimir Putin, RACIB appealed to the government to change its stance on regulating the industry. The organization stated that Russia’s delayed adoption of cryptocurrency regulations had left it far behind other countries and had caused local talent to relocate to other jurisdictions, including the Eurasian Economic Union (EAEU) countries.
The letter also called on Putin to build a working group of representatives from the digital asset community to collaborate with the government on building the state’s crypto regulation policy. RACIB is particularly interested in developing and applying cross-border payment systems in Russia, EAEU jurisdictions, Brazil, India, China, and South Africa.
The RACIB pointed out that Russia had enforced its first crypto law, “On Digital Financial Assets,” in 2021. However, lawmakers had introduced legal amendments in November 2022, proposing to launch a “national cryptocurrency exchange.” The RACIB argues that some of these amendments would significantly complicate the implementation of digital financial technologies in Russia and introduce criminal sanctions for local blockchain developers.
The RACIB’s executive director, Alexander Brazhnikov, warned that the proposed amendments would give a “sea of choice” for Russian enforcement authorities to pressure the local crypto community. “It will not be easy for companies in the digital asset industry to prove that they are doing everything within the framework of the Russian legislation,” Brazhnikov said.
According to the RACIB, Russia’s hostile regulatory stance on crypto prevents local businesses from fully utilizing the potential of crypto and creates serious risks for the Russian economy. The organization has called on Putin to take action to change the existing state policy around the regulation of digital financial assets.
The news comes shortly after the head of Bank of Russia’s financial stability department, Elizaveta Danilova, reiterated the central bank’s uncompromised stance on crypto. Danilova argued that legalizing crypto investments threatens the welfare of Russian citizens. However, the Bank of Russia sees no problem in legalizing crypto mining and allowing crypto use in cross-border transactions.
In conclusion, the RACIB’s open letter to Putin highlights the urgent need for Russia to address its regulatory hostility towards the cryptocurrency industry. The letter suggests that the government’s approach risks causing direct financial losses and will prevent local businesses from benefiting fully from the potential of crypto. Putin is urged to take swift action to build a working group of representatives from the digital asset community to collaborate with the government on building the state’s crypto regulation policy.