Decision-makers in Russia are indicating that the much-anticipated regulation of cryptocurrencies in the nation may be pushed back until 2025, citing a focus on other pressing matters within the government’s agenda report says.
Anatoly Aksakov, the Chairman of the State Duma’s Committee on the Financial Markets, expressed optimism regarding the eventual legalization of cryptocurrencies in Russia, stating that it is “only a matter of time.” However, Aksakov conceded that the adoption of the necessary bills could extend into the years 2024 to 2025, potentially causing concern among stakeholders eagerly awaiting regulatory clarity.
The delay comes amidst growing calls for swift action in regulating the crypto sector. In late February, German Neglyad, Deputy Head of Russia’s anti-money-laundering regulator Rosfinmonitoring, urged the Kremlin to expedite the rollout of crypto regulations. The urgency was further underscored by a recent analysis by the Eurasian Group on Combating Money Laundering and the Financing of Terrorism (EAG), which downgraded Russia’s Financial Action Task Force (FATF) rating.
The downgrading of Russia’s compliance ranking for crypto regulation from “compliant” to “partially compliant” by FATF highlights the need for prompt action in addressing regulatory shortcomings.
Despite repeated attempts to regulate the sector, including proposals for a blanket ban on cryptocurrencies by the Central Bank, consensus on the issue remains elusive. While ministries such as the energy and finance ministries advocate for regulation and taxation of the sector, conflicting interests have resulted in a protracted impasse.
The delay in regulation comes at a time when Russia’s crypto industry is experiencing significant growth. Domestic companies are increasingly utilizing cryptocurrencies for international trade, while the crypto mining business thrives despite lacking legal status. The absence of regulation also means that crypto exchanges operate in a largely unregulated environment, with the nation’s peer-to-peer (P2P) market reportedly expanding rapidly.
Statistics suggest a substantial interest in cryptocurrencies among Russians, with reports indicating that up to 29% of individuals aged 22 to 44 own cryptoassets. The government estimates that approximately 10% of citizens possess crypto wallets, indicating a widespread adoption of digital assets within the country.
Amidst the debate over crypto regulation, lawmakers and regulators have shifted their focus to other priority areas, including the development of legislation governing digital financial assets and the introduction of the digital ruble, Russia’s central bank digital currency (CBDC). Despite these developments, Aksakov remains confident that Moscow will address the issue of crypto regulation in due course, emphasizing the growing recognition of the potential of blockchain technology and a departure from discussions of outright bans on cryptocurrencies.
