Russia Abandons Crypto Exchange Plan, Putting Focus on Rules

Contrary to original plans, Russia is going to deliver a regulatory framework for crypto by the end of 2023.

by Tadas Klimasevskis. Fact checked by: Ciaran Lawler, Editor: Stefan Trapp

Published: May 30, 2023 │ 12:00 PM GMT

A huge bear walking away from a bin full of glowing blockchain documents. — *Created by Gabor Kovacs from DailyCoin*

Russia took a U-turn on plans to build a national Central Bank crypto exchange.
Cryptocurrency payments for international trade were approved earlier this year.
The State Duma is divided into two camps over crypto’s future in the country.

The Russian Federation has officially halted plans to establish a national cryptocurrency exchange. Instead, Russia’s government intends to focus on regulating the private sector. According to State Duma’s Head of Economy Anatoly Aksakov, it’s better to establish a legal, regulatory framework for crypto businesses that operate in the country rather than use one centralized structure.

Russia’s Central Bank will almost certainly regulate these crypto exchanges. Still, multiple crypto exchanges complying with Russian law would also mean that these platforms are less susceptible to European Union and United States sanctions on Russia than one centralized exchange. This new legal framework for crypto businesses and traders is set to commence by the end of the year.

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

Finance Ministry Opposed to Crypto

Despite Vladimir Putin’s earlier claims of support for decentralization, it’s clear that the State Duma’s Finance Ministry was a crypto opponent from the start. Ministry Director Ivan Chebeskov emphasized that illegal mining issues should be tackled, as Russia has one of the highest rates of illegal cryptocurrency mining with stolen electricity.

On The Flipside

These crypto exchanges can evade legally imposed sanctions by the European Union and the United States on Russia for the ongoing invasion of Ukraine.
Since the invasion, the crypto adoption rate has skyrocketed in Ukraine and plunged in Russia despite both countries actively using crypto in military activities.