Russian Crypto Regulation: Delays Expected Until 2025
Russian crypto regulation may face significant delays, with the Chairman of the State Duma’s Committee on the Financial Markets, Anatoly Aksakov, suggesting that the adoption of corresponding bills will not happen until 2024 to 2025. This delay could have serious implications as the country’s compliance ranking for crypto regulation has been downgraded by the Financial Action Task Force (FATF) from “compliant” to “partially compliant.” While some government ministries are in favor of regulating and taxing the sector, others, such as the Central Bank, have called for a blanket ban on cryptocurrencies. This impasse is problematic considering that Russian companies are already using crypto for international trade and the domestic crypto mining industry is thriving.
The Urgency of Russian Crypto Regulation
German Neglyad, the Deputy Head of Russia’s anti-money laundering regulator Rosfinmonitoring, has urged the Kremlin to accelerate the rollout of crypto regulation. The downgrading of Russia’s FATF rating highlights the need for urgent action. Currently, crypto exchanges operate without proper regulation, and the nation’s P2P market is expanding rapidly. Furthermore, reports suggest that a significant percentage of Russians own cryptoassets or have crypto wallets. Delaying regulation not only poses risks to financial stability but also results in a loss of tax revenue for the Treasury.
Other Priorities Take Precedence
Lawmakers and regulators in Russia seem to be prioritizing other matters over crypto regulation. The focus is on pilots and legislation related to digital financial assets and the development of a digital ruble, rather than addressing immediate concerns about cryptocurrency regulations. However, Aksakov remains confident that Moscow will eventually tackle this issue. While there is no longer talk of banning cryptocurrencies in Russia and politicians recognize the potential of blockchain technology, the deadlines for legalization set by Aksakov have been constantly shifting.
Hot Take: The Cost of Delayed Regulation
The delay in Russian crypto regulation could have significant consequences. With a lack of legal framework for crypto mining, the Treasury is losing out on billions of rubles in tax revenue annually. Additionally, the absence of proper regulation exposes consumers and investors to risks associated with unregulated exchanges and a rapidly growing P2P market. It is crucial for Russian authorities to prioritize the establishment of clear and comprehensive regulations that protect both the interests of individuals and the stability of the financial system.
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