Russian lawmakers have decided to end plans for creating a state-owned cryptocurrency exchange, planning instead to set rules and regulations for already existing enterprises, a Russian news outlet reported Sunday.
Colin Wu of Wu Blockchain broke the story on Twitter early Monday morning. He linked a translation of a Russian news outlet that explained that the country’s new focus would be to allow private companies to build crypto exchanges
Russian lawmakers have said they will no longer move forward with plans to create a state-level cryptocurrency trading platform. Focus on developing rules that would allow private companies to set up such trading platforms, overseen by Russia’s central bank, which is set to…
— Wu Blockchain (@WuBlockchain) May 29, 2023
According to the news report, Ivan Chebeskov, Director of the Financial Policy Department of the Ministry of Finance for the Russian Federation, said, “The [Ministry] did not support the establishment of one national crypto-exchange.” The idea, instead, is to “legally regulate the possibility of creating such sites by business.”
Anatoly Aksakov, head of the Russian lower house committee on financial markets, added, “Instead of creating one national crypto exchange, it is planned to establish rules for the establishment and operation of such infrastructures.”
He added that crypto exchanges will be allowed to facilitate cross border payments, although he did not specify which ones, and acknowledged that they would probably face new restrictions.
Izvestia, the Russian outlet that published the story, reported that the Central Bank will “probably” regulate the work of these platforms, and that the institution will manage international settlements within the regulatory framework of the country.
Several of the private crypto operators within the Russian Federation were encouraged by the news.
“This will help minimize the risks of sanctions, cyber attacks on infrastructure, and eliminate possible market monopolies,” Oleg Ogienko of BitRiver, a cryptocurrency mining operation that operates in Russia, told Izvestia. Reinforcing this view, commercial director for GIS Mining, Ivan Gostev, said this would “allow for more competitive and innovative companies to develop.”
The private sector’s positive view should come as no surprise, as Russia ranks #137 of 180 countries on the 2022 Global Corruptions Index, suggesting the need for caution in their stately endeavors.
Russian authorities have been running hot and cold with the digital asset space for years. Early last year, the Bank of Russia proposed an outright ban on crypto payments, and a month later the Ministry of Finance submitted a proposal for Bitcoin regulations. Later, Vladimir Putin signed a law to outlaw payments in digital assets, only for the country to investigate stablecoins as a way to bypass sanctions.
Today’s news comes amid ongoing Western-led financial sanctions against Russia after its invasion of Ukraine. Despite the history of mixed signals, today potentially marks a new chapter in the government’s relationship with cryptocurrencies.