Russia has been known to have a strict stance on crypto products within its territory. In the year 2022, The Russian Central Bank proposed a ban on the use crypto products and mining of other digital assets within its territory as it cited that crypto products threatened the nation’s financial stability, citizens’ well being and its monetary policy sovereignty.
During the same period, a global crackdown on crypto products was witnessed with countries like The US and other Asian Nations taking a strict stance towards the use of crypto products. The nations were worried that privately operated digital currencies were highly volatile and had the potential to undermine their control over financial and monetary systems. Russia had for a long time taken a stance that crypto products could be used to launder money and finance terrorist activities. However, in the year 2020, the Russian authorities allowed the “use” of crypto but banned them as a means of payment.
In a stance that seems to contradict its earlier stance, The Russian Central Bank has stated that it is willing to allow the use of crypto in an experimental environment that is set to allow crypto firms to settle international business deals using crypto.
According to The Governor of The Russian Central Bank, cryptocurrency will be used in external settlements. Elvira Nabiullina, the governor and Vladimir Putin’s long-serving ally, seems to have relaxed her stance due to prevailing economic sanctions against Russia. Mrs. Nabiullina has in the past been a vehement critic of crypto, terming them as “private cryptoassets”. Though she has spoken for the ban on crypto coins in the past, she is willing to allow the acceleration of the launch of The Digital Ruble.
Mrs. Nabiullina has in a meeting with law makers, expressed that she maintains adherence to the country’s past policy on crypto but for external payments, she is willing to take a relaxed stance since it has the ability to conduct business. She also confirmed that a draft bill is being being prepared and that special regulatory organizations are being created to oversee the experiment.
With, this new stance, Russia is aiming to achieve some benefits. Russian importers and exporters have been frozen out and excluded from the international market due to economic sanctions taken against it by western economic powers and their allies as retaliation to its current invasion in Ukraine. Due to these sanctions, some Russian traders are hoping that the use of crypto instead of the US Dollar will enable Russia to settle external and international trade deals.
According to the Vice President of the Russian Central Bank, analysis is underway to determine which firms will be onboarded into the experiment. The same official also confirmed that the experiment will combine state agencies and private firms while promising to clarify the details of the project on a later date.
Author’s Sentiments
The relaxed stance of Russia is yet another indication that time and circumstances have the ability to change the governments’ stance on crypto products either voluntarily or through exigent circumstances. The recent move from Russia could however result in 2 very distinct outcomes.
First, the embracing of crypto as a means of conducting import/export business has a massive potential create growth, generate and grow wealth, further more adoption of crypto products and create new revenue streams. This adoption could be disruptive to the market as it needs the creation of new infrastructure to support international import/export trade deals and transactions. The global Import/export business is worth a lot of money as every country relies on it for survival, whether it is the importation of basic commodities like food and clothing, or acquisition of raw materials and medical supplies or even finished end products like cars and electronics. Therein lie countless opportunities for grabs by investors and crypto users.
On the downside, this could spell disaster for the crypto economy as it cannot stand another multi-national approach in frustrating crypto products being used by Russia as a way of retaliation for finding their way to navigate around economic sanctions. Western economic powers and their allies might create a well-coordinated crackdown on crypto products that decide to offer their services to Russia. This crackdown will not only affect crypto products that will show affiliation to Russia but also other innocent firms as crypto products are pegged to each other through exchanges, investors, liquidity pools and infrastructure. It will be an all-out war against crypto.
