Russian legislators have been collaborating on creating a national cryptocurrency exchange, a move that was reportedly supported by the Ministry of Finance and the Central Bank of Russia. These government entities have a long history of conflict over crypto legislation in the nation, but have now come together to support the initiative.
According to local media reports, the Duma, or the lower house of the Russian government, has been in talks with market participants about changes to the country's current cryptocurrency legislation "on digital financial assets."
The central bank is the first to get a presentation of the revisions, which would establish the legal foundation for a national exchange.
Member of the Duma's Committee of Economic Policy Sergey Altuhov pointed out that no one can deny the existence of cryptocurrencies in today's global financial system.
"The problem is they circulate in a vast stream outside of governmental regulation. The federal budget has lost billions of dollars in tax income as a result," Altuhov said.
Meanwhile, Anatoly Aksakov, the chair of the Duma's Committee on Financial Market, said back in June that Russia may establish a national cryptocurrency exchange as a member of the Moscow Exchange, "a credible organization with an extensive history."
The said financial organization made a law in September to permit trading in digital financial assets on behalf of the central bank.
Historically, the nation's lawmakers have disagreed with the idea of using cryptocurrencies as a payment method. In 2020, the Russian government enacted a law prohibiting its use for payment purposes. The central bank has also been skeptical because it wants to protect the status of the ruble as the only legal tender in Russia. (Related: Russia legalizes cryptocurrencies for cross-border transactions.)
Deputy Minister of Finance Alexei Moiseev emphasized the importance of legalizing and supporting local cryptocurrency platforms now, adding that many Russians rely on foreign platforms to open cryptocurrency wallets which could be a dangerous situation given Western sanctions.
"It is necessary to do this in Russia, involving entities supervised by the central bank, which are obliged to comply with Anti-Money Laundering [regulations] and Know Your Customer requirements," Moiseev said.
Earlier this month, a bill was presented to the House that seeks to allow cryptocurrency mining and selling of the extracted coins and design a Russian marketplace for cryptocurrency sales.
Local miners would still be permitted to use global marketplaces, which would exempt transactions from Russian currency controls and rules. However, these undertakings would still need to be reported to the country's tax office.
Treasury official: Russia can use crypto to evade sanctions
Elizabeth Rosenberg, U.S. Treasury's assistant secretary for Terrorist Financing and Financial Crimes, told Sen. Elizabeth Warren (D-Mass) that Russia can use cryptocurrencies to evade sanctions launched against the Kremlin for its invasion of Ukraine.
"Yes, senator, that's possible," Rosenberg told the senator when she asked her if digital assets can be used to skirt sanctions.
The senator said she'd been worried about the possibility of the digital currencies being used by Moscow to bypass sanctions. "Back then we already knew that countries like North Korea had used crypto to skirt sanctions and launder at least hundreds of millions of dollars. And Russia could easily be part of that," Warren said.
According to the Department of the Treasury, it has already identified Russian entities attempting to get around the Western sanctions with crypto. CNBC reported: "Twenty-two individuals and two entities, including a neo-Nazi paramilitary group, were designated this month for helping Russia digitally finance the war on Ukraine."
Russia-based Darknet Market Hydra and Garantex, a virtual currency exchange, were also sanctioned earlier this year partly to cut off avenues for potential sanctions evasion.
The government already blocked transactions between sanctioned crypto companies and anyone in the United States. However, Russia had developed its own digital currency as early as February to trade directly with countries without converting to dollars.
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Watch this video that talks about the legalization of the Russian cryptocurrency system in international trade.
This video is from Martin Brodel's channel on Brighteon.com.
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