With regulations on the horizon, high-ranking officials in Russia have come up with ideas on how to harness cryptocurrencies when, hopefully, they are finally legalized. The need of finding ways to circumvent sanctions on several fronts seems to be the main incentive for the ingenuity in the corridors of power in Moscow.
Also read: Iran Steps Up Plan for National Crypto After US Sanctions
Foreign Crypto Capital for Crimea
The annexation of Crimea is considered by many in Russia as a PR success for the Kremlin, but the move has also created a lot of headaches both political and financial, home and abroad. The economic integration of the region into the Russian Federation and the diplomatic consequences have come with a hefty price tag.
Beside state subsidies, the autonomous republic definitely needs fresh private investments but international sanctions have stood in the way of foreign capital. Now a top parliamentarian says cryptocurrencies would allow investors to put their money in Crimea without fear of being implicated in violating the restrictions. Speaking to a local radio station, and quoted by RIA Novosti, the head of the parliamentary Financial Market Committee, Anatoly Aksakov said:
With this tool, when we get permission in the future, we expect to attract those people who are afraid to invest directly in Crimea but through an encrypted scheme will be able to finance projects which promise good returns.
Aksakov was talking about the postponed Russian crypto legislation – three bills were voted on first reading in the State Duma, this past May. Their final adoption was scheduled to take place in July but deputies found it hard to synchronize the drafts before the summer break and eventually left the second and third reading for the fall session of the lower house of Russia’s parliament.
“Encrypted Scheme”
In his interview, the chairman of the important committee also explained what he meant by “encrypted scheme”. Cryptocurrencies will appear at a certain stage, Aksakov conceded but also noted that in his opinion these should be “tied to real money” and must not be “some unsecured instruments”. “Encrypted money”, the deputy elaborated, can be issued in return for a bank deposit in rubles. Thus it becomes impossible to see who’s operating with these funds, he said.
Crimea is interesting for both Asian and European investors, Aksakov added. Many other officials and representatives of the country’s crypto community share his opinion. A proposal to turn the peninsula into a regulatory sandbox for testing crypto and blockchain technologies was made in Russia’s parliament in February. The Russian Association of Cryptocurrencies and Blockchain has been working on a roadmap to implement a “Crypto-Crimea” plan.
In the meantime, Russian business circles have renewed their efforts to convince policy makers that creating crypto offshore zones is a good idea, too. The backers of the initiative, representatives of a leading business association, recently proposed the establishment of two such zones – in Kaliningrad, the westernmost oblast of Russia, and in Primorsky Krai, a Far Eastern region that has already announced serious intentions regarding the development of the crypto sector.
Trade Deals in Cryptocurrency
Besides crypto offshores and sandboxes, Russia is also tempted to explore another application of cryptocurrencies – foreign trade. The main incentive, as is the case with other countries like Venezuela and Iran, is the next round of U.S. sanctions. The latest measures were introduced by Washington in connection with the Skripal case.
Here’s one Russian reaction – the USA has crossed a “red line” and Moscow must think about an “asymmetrical response”, according to the deputy-chairman of the parliamentary Committee on Economic Policy, Innovation Development and Entrepreneurship, Vladimir Gutenev, quoted by TASS. Among some controversial suggestions like deploying nuclear arms in Syria, he also sees this response in using cryptocurrency in Russian exports of military and civil products, both likely to be affected by the new American sanctions.
What are your expectations about the future of cryptocurrencies in Russia? Share them in the comments section below.
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