Russia has planned to establish two new cryptocurrency exchanges, one in Moscow and another in St. Petersburg, to support foreign economic activity (FEA). These exchanges are expected to operate under an experimental legal regime due to existing regulatory uncertainties.
Experts believe that large corporations, also known as blue chips, will likely be the first to gain access to these platforms. However, the functionality of these exchanges may be restricted because of the risks associated with international sanctions.
Exchanges Focused Around Stablecoins
According to sources from Kommersant, plans are underway to create these exchanges to facilitate foreign economic activities. The exchange in St. Petersburg might utilize the existing St. Petersburg Currency Exchange (SPCE) database. Meanwhile, the second platform in Moscow may be based either on the Moscow Exchange or as a separate entity within an experimental legal regime. The exact structure has not yet been finalized.
Stablecoin development is the main focus of these platforms, especially for those associated with the yuan and the larger BRICS currency basket. In Russia, stablecoins—a type of cryptocurrency—present particular difficulties.
The CEO of BitRiver’s communications department, Oleg Ogienko, claims that because stablecoins have an issuing centre and an obliged party, they can be legally classified as digital financial assets in Russia. Their rollout is complicated, nevertheless, because of their technological integration with Russia’s blockchain and problems with convertibility and liquidity.
State of Cryptocurrency in Russia
Federal Law No. 259 “On Digital Financial Assets” is the main piece of legislation governing cryptocurrencies in Russia. This law does not directly address how cryptocurrency exchanges operate; instead, it describes the legal parameters around the creation and transfer of digital financial assets.
As a result, the regulatory environment for cryptocurrency exchanges in Russia is murky. Mikhail Uspensky, a member of the State Duma’s expert council on cryptocurrency regulation, points out that the experimental legal regime (EPR), which was just recently enacted, is the sole applicable rule.
These exchanges will probably start in test mode, accessible to a small number of users only. The principal consumers are anticipated to be the biggest importers and exporters as well as the subsidiaries of large organisations.
Mr Uspensky states that it is unlikely that individual users and small and medium-sized businesses will have instant access to the platforms. The arrangement of the trial, including its composition and participants’ range of involvement, will be entirely within the regulator’s control.
The Risks that Come Along?
The creator of TerraCrypto, Nikita Vassev, voiced doubts on the extensive application of these exchanges. He implies that people using these domestic platforms will only do so if they have no other options.
Unless they are forced to use the Russian exchanges, users who have access to international exchanges, which have been improved over time by renowned developers, are unlikely to switch.Â
The experts Kommersant spoke with also pointed out that there are a lot of hazards involved in this undertaking. If confidentiality is violated, the transparency of blockchain technology can become problematic.
Uspensky issued a warning, saying that data regarding transactions made on these Russian exchanges might end up on lists of those subject to sanctions, which would prevent them from transacting with cryptocurrencies. If this occurs, future owners of digital currencies may also have difficulty, even if they have no direct connection to Russia, in addition to the participants in these transactions.
In conclusion, while the creation of these two crypto exchanges represents a significant development in Russia’s evolving cryptocurrency landscape, their success will largely depend on how well they can navigate the regulatory and sanctions-related challenges that lie ahead.
Putin Passes Bill To Legalize BTC Mining & Trading In Russia
Russia Moves to Regulate Cryptocurrencies Amid Sanctions Pressure