After the "March 4", many encryption companies chose to go south to Hong Kong. Maybe they have another choice in the future, that is, north. According to Leonid Petukhov, head of the Russian Far East Investment and Export Authority (IPA), the agency is considering setting up an offshore financial center on Black Box Island on the Sino-Russian border as a hub for cryptocurrency transactions and other financial activities.
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The recently held International Economic Forum in St. Petersburg ended on June 8. Among the many issues, cryptocurrencies are hot, and representatives from many countries are involved.
Leonid Petukhov, head of the Russian Far East Investment and Export Authority (IPA), said government agencies are considering establishing a “financial center” on the Sino-Russian border. The news was first reported by Russia's largest news agency, the Tas Society.
Petukhov told reporters that the Black Box Island on the Amur River is the prime location for such an offshore financial center. The island belongs to the city of Khabarovsk, Russia, on the border between China and Russia. Therefore, Petukhov said that this location is very suitable for Sino-Russian cooperation, which will become a hub for cryptocurrency transactions, encryption-related stock exchanges and other foreign exchange markets.
Currently, Russia has two other administrative districts designed as financial centers. One of the districts is located on the Russian island of Vladivostok; the other is located on the island of Oktyabrsky in Kaliningrad. Residents in these areas are completely exempt from income tax when it comes to dividends and profits arising from the shares of foreign companies. However, there is currently no such center for cryptocurrency transactions, and Black Box Island will be the first.
The proposal is similar to the “zone” of countries such as the Philippines. For example, the Cagayan Special Economic Zone in the Philippines has become the center of cryptocurrency innovation. The country’s supervisory body said that since last year, investment in the region has surged, the largest increase in more than two decades.
Russia hopes to learn from these experiments and establish its own economic zone that focuses on cryptocurrency trading and the foreign exchange market. Choosing a location on the Sino-Russian border is bound to attract a large number of Chinese investors. After all, Chinese investors have been one of the most active people in the encryption market. At the same time, trading activities in economic zones often mean legal compliance. However, investors and companies also need to wait and see the specific regulations and policies promulgated in the region. Just as exchanges need to apply for a license to the Cagayan Special Economic Zone in the Philippines, companies may face the same problem in Black Box Island. On the other hand, the Chinese government has been suppressing speculation in cryptocurrency transactions. The Chinese government’s attitude towards this proposal is also very important. Whether the Chinese authorities will comment on the proposal is very worthy of attention.