Sanctions Motivate Russia to Create Own Crypto Market Infrastructure – Russia has turned its focus to cryptocurrencies in the face of rising international sanctions over its invasion of Ukraine, raising concerns in the West that the government may use them to dodge financial restrictions. Russians are finding it more difficult to cash out their digital possessions as a result of the sanctions.
As sanctions have resulted in restrictions on foreign exchanges for Russian nationals, the incentives to construct the Russian infrastructure for the cryptocurrency market has intensified. Ivan Chebeskov, director of the Ministry of Finance’s Financial Policy Department, made the remark during the International Banking Day conference, according to Tass.
According to the high-ranking official, it has become extremely difficult for Russians who’ve already invested in cryptocurrencies abroad to withdraw their cash and convert them into fiat currency. Foreign regulators are concerned about Russian citizenship, money being stopped, and new accounts rejected.
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“As a result, the incentive to build a Russian infrastructure for digital currencies grows even stronger.”
Russians would be able to withdraw their money as well as perform other transactions on a Russian crypto market. A rising percentage of them, according to the Finance Ministry, are eager to transfer their coinage to Russia.
Russian users have already been denied access to some trading sites, including the biggest South Korean exchanges.
The law “On Digital Financial Assets,” which took effect in January 2021, only partially regulates the Russian crypto market. The Central Bank of Russia has proposed a blanket ban on cryptocurrencies, whereas most institutions support Minfin’s proposal to license the business under stringent government control.
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A regulation plan based on the ministry’s approach was adopted by the federal government in February. Later that month, the department introduced a new bill titled “On Digital Currency,” which set forth detailed regulations for the industry. According to the Tass news agency, the Ministry of Finance is also focusing on issues related to crypto income taxation.