Crypto adoption appears to be on the rise in Russia – where lawmakers have suggested the idea of fostering domestic crypto exchanges as an alternative to using international platforms.
Per the Russian Parliamentary Gazette, Aleksander Yakubovsky, an MP and part of the crypto working group that is seeking to create a framework of regulations for the sector, claimed that the international community would struggle to cut off Russia’s access to crypto.
The MP was quoted as stating:
“Russian miners will not leave the market. In September last year, Russia ranked third in terms of [crypto] technical capacity, primarily in the bitcoin (BTC) field. This is an enormous amount of power. So we have all the resources [we need.] That includes the creation of our own exchanges, the use of payment platforms, and other platforms still.”
Yakubovsky opined that crypto was “an area where it is difficult to talk about really placing restrictions on this country.”
This comes at the time when Russia is hit with heavy sanctions following its invasion of Ukraine.
Yakubovsky was also asked how “the cryptocurrency market in Russia” would “develop under sanctions” – and if the current situation could even “open up new opportunities” in space.
Yakubovsky replied that much would depend on the quality of the legislation that is now “being formed in this space.” He added:
“We are currently working on a solution to this problem. I am sure that this can give Russia access to the financial market, which [the Western allies] are now trying to close. In addition, the competent development of digital financial assets will minimize the damage from sanctions imposed on Russia.”
Whether or not this proves to be the case, most appear to agree that crypto demand and adoption are on the up in Russia.
Regnum reported that Anton Zubets, an Associate Professor at the Financial University under the Government of the Russian Federation (aka FinU) stated that “inflation and restrictions on bank withdrawals” were spurring adoption.
However, he claimed that reports of a mass exodus to BTC and other tokens were wide of the mark, claiming that crypto buying was dwarfed by demand for “other assets” including the dollar, the euro, the Chinese yuan, and metals like gold.
Zubets claimed that when it came to in-demand assets, crypto demand “does not exceed 1-3% in comparison with other assets.”
The academic added that in addition to those who felt that crypto was an alternative store of value to “protect funds from depreciation,” others were eyeing the market “for illegal actions, namely for the illegal withdrawal of funds abroad instead of [sending] cash currency.”
He claimed that “money laundering and the anonymization of illegally obtained funds,” were other motivating factors for adoption, as were “payment for goods and services on the black market.”
Meanwhile, Olga Kovitidi, a Member of the Federation Council’s Crimean Executive Branch stated that the government would not sit idly by while a black market developed – and had no appetite for a return to the 1990s when a booming trade in underground fiat trading undermined the economies of much of the former Soviet Union.
Per Prime, Kovitidi stated:
“Will the black market develop [due to] the temporary procedures placed on cash transactions by the Central Bank? It will. We all went through this in the Nineties. Should we fight it? Yes, we should.”
On Twitter, some shared anecdotes about how sanctions appear to have turned some Russians who might never have otherwise toward crypto adoption.
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