【Exclusive from ChainDD】Russia abandons the plan to build a national cryptocurrency exchange in order to respond to financial sanctions as soon as possible.

Russia cancels plan for national cryptocurrency exchange to respond to financial sanctions quickly.

Despite the advancement of digital ruble, the creation of a state-level cryptocurrency exchange has been abandoned, and regulatory and legislative bodies are preparing to use established rules to control the development of the cryptocurrency industry.

Yesterday (May 29), Anatoly Aksakov, Chairman of the Financial Market Committee of the State Duma of Russia, announced that Russia will no longer pursue plans to create a national cryptocurrency exchange. Instead, it will focus on developing rules that allow private companies to establish such exchanges.

Russia will establish regulations for cryptocurrency exchanges

Anatoly explains that restrictions may be imposed on exchanges due to the fact that they will assist companies in cross-border settlements. Meanwhile, new cryptocurrency exchanges will emerge. This viewpoint has received support from the Ministry of Finance, and these exchanges will be regulated by the Russian Central Bank, which will introduce new regulations by the end of this year.

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Ivan Chebeskov, Director of the Financial Policy Department of the Russian Ministry of Finance, recently stated that the central bank believes that cryptocurrencies should be fully regulated. Currently, the Bank of Russia has agreed to bring mining into the legal field, making it possible to use cryptocurrency for international settlement and exchange transactions within an experimental legal system. Anatoly also expressed his opinion on cryptocurrencies last year, stating that by 2023, cryptocurrency will become a legal tender in Russia, but at present, cryptocurrency is only used in Russia’s foreign trade.

Last June, Anatoly proposed that Russia’s national cryptocurrency exchange could be launched as part of the Moscow Exchange, which is “a respected organization with a long tradition.” In September, representatives of the Moscow Exchange drafted a bill allowing the trading of digital financial assets.

In November 2022, the Russian legislative side announced that it is developing a draft amendment that will allow the country to launch a national cryptocurrency exchange. Sergei Artukhov, a member of the Duma’s Economic Policy Committee, emphasized the financial rationality of this measure:

“Denying the existence of cryptocurrencies is meaningless. The problem is that they are circulating outside of state regulation. These are billions of rubles in lost tax revenue for the federal budget.”

Anatoly said that in the future, all cryptocurrency exchanges will be regulated by local regulations because they can be used to bypass US and European financial sanctions.

Russia will continue to create new cryptocurrency platforms to deal with sanctions

These series of actions by Russia are all to cope with the current embarrassing situation in Russia.

In March 2022, the EU announced plans to remove many Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system, and the US Office of Foreign Assets Control added several Russian entities and individuals to its sanctions list. Financial sanctions against Russia by the US and other countries have caused panic in Russia’s economic, social, and financial development. Please refer to the previous article by ChainDD for analysis: 【ChainDD Exclusive】Financial Nuclear Bomb Begins to Backfire: Global Energy and Rare Metals Soar, Crypto Market in Chaos.

Recently, the US Department of Justice’s National Security and Crime Department are investigating the situation where the cryptocurrency exchange provided services to Russians. Earlier this month, Binance was accused of being under investigation by the US Department of Justice’s National Security Department because it allowed Russians to use cryptocurrency exchanges, violating US sanctions. There are currently no charges related to the investigation against the company or its executives. However, after sanctions were imposed on Russia in April 2022, Binance restricted its services to the country. Please download the latest app of ChainDD to read the previous article: Binance is being investigated by the US for allegedly violating sanctions against Russia.

The digital ruble is still advancing

Although Russia has taken the above actions in the field of cryptocurrency assets, this action will not affect the implementation process of the digital ruble. In 2020, Russia passed a major cryptocurrency law, the Digital Financial Assets Act, officially prohibiting the use of cryptocurrencies such as Bitcoin (BTC) for payments. In the first half of 2022, Russian President Putin opened the door to cryptocurrency and said that Russian technical personnel are abundant and energy resources are rich, making it the most ideal area for mining development.

Following Putin’s support, the digital ruble began to flourish. Currently, the Ministry of Finance and the Central Bank both claim to be doing their utmost to develop the system and technology.

According to the latest currency policy update by the Russian central bank, all banks and financial institutions will be connected to the digital ruble platform from 2024.

ChainDD has previously provided an in-depth analysis of Russia’s digital ruble promotion plan, including Russia’s market share of cryptocurrencies.

With the release of the digital ruble in 2024, news from Russia’s cryptocurrency sector has been constant in the past six months, with Russia seeking to build cross-border cryptocurrency platforms as an important measure to deal with financial sanctions.

In mid-month, Anatoly Aksakov, Chairman of the Duma Financial Markets Committee, said that the digital ruble bill project was awaiting discussion and approval and could be passed in June. The Russian central bank is currently waiting for the rules set to be issued in order to conduct live tests of the real user capabilities of CBDC (central bank digital currency). Russia also plans to launch an offline version of the digital ruble by 2025, aimed at integrating non-bank financial intermediaries, financial platforms, and trading infrastructure.

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