Russia Shelves Plans for National Crypto Exchange

In Brief

• Russia has decided to scrap plans for a national crypto exchange.
• The government will instead focus on regulating the industry and supporting existing exchanges.
• Russia could also make crypto a legal form of money soon.

Russia has decided to cancel a planned national crypto exchange. Instead, it will focus on regulating the industry and supporting existing exchanges with a view to cross-border transactions.
Local media outlets report that Russia has decided to cancel its planned national crypto exchange. The country had planned to launch this exchange to counter some of the effects of the sanctions posed by international entities as a result of the invasion of Ukraine.

Crypto Regulations Prioritized
The media outlets reported on May 29 that the idea had been scrapped altogether. Instead, the government will first focus on creating rules and regulations for the crypto industry. Anatoly Aksakov, head of the State Duma Committee and member of the National Banking Council, said of the development,“…since exchanges will help businesses make cross-border settlements, restrictions may begin to be imposed on them. At the same time, new organizations will appear. We agree with this concept in the Ministry of Finance. Market participants are confident: a new mechanism will help reduce sanctions risks and the likelihood of cyber attacks, as well as support competition.”

Compliance seems to be a key focus for the Russian authorities at the moment. Other Russian lawmakers concurred on this point and are hesitant to launch an exchange without established rules.

Russia first revealed its plans to launch a crypto exchange in December 2022. The slated launch date mentioned at the time was June 2023, but it now looks like it could be postponed indefinitely if it launches at all.

Russia Wants To Support Existing Crypto Exchanges
Russia is now turning its attention to creating a framework for existing crypto exchanges. Rather than focus on its own exchange, it will create rules that support existing exchanges such that they support cross-border transactions.

The Ministry of Finance also supports the new strategy, which was against the national crypto exchange in the first place. There isn’t too much information on the specifics of the crypto regulation, but Russia has been taking wider steps with respect to imposing rules on the crypto market.

Crypto Could Become Legal in Russia
Among Russia’s most notable moves has been the decision to recognize cryptocurrencies as legitimate forms of money. A draft legislation is under consideration that would recognize crypto as legal tender, making Russia another notable addition to this list, which includes El Salvador and the Central African Republic.

This is a quick about-turn after Putin banned digital payments in July 2022. The industry still seems to be going, however, as Russia is the second-largest miner in the world.

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