With authorities in Moscow still trying to find their bearings on Bitcoin, the largest Russian exchange has announced its readiness to organize trading of cryptocurrency-based financial instruments. It would be faster and easier, MOEX said in comments to local media. Russia’s Central Bank, however, has rejected calls from the Finance Ministry to allow buying and selling crypto derivatives on traditional markets.
Minfin Pushing for Trade, Centrobank Pulling the Brake
Representatives of the ministry and the bank have recently met to discuss the legalization of crypto trade on registered exchanges in the country, Russia’s Deputy Finance Minister Alexei Moiseev revealed. “The Central Bank does not support our proposals to legalize crypto trading”, Moiseev stressed, quoted by RIA Novosti. He added that his ministry was looking into alternative sets of criteria to shortlist exchanges, which could host such trade. Reluctant to reveal more details, he hinted that some of those options were “geographical”.
The Ministry of Finance is finalizing a draft on cryptocurrency regulation that should be introduced to the State Duma next month. At the end of December, Moiseev announced that his department and the CBR had prepared a bill to regulate Initial Coin Offerings (ICOs). “We’ve tried to avoid the temptation to apply to digital assets, their circulation and related fundraising, the same regulations we have in place for financial markets”, he said.
Cryptocurrency has been defined in the bill as “other property”, and ICOs referred to as crowdfunding used by startups and small businesses to attract capital from a large number of micro-investors. “Minfin” wants to limit the capital collected through a single ICO and cap the share of each “unqualified investor”.
Crypto Derivatives Must Be Within the Law
The initiatives of the Russian Finance Ministry have actually attracted attention and support from representatives of the traditional financial sector. Moscow Exchange, the largest in the country, announced willingness to provide ground for coin-based trading. “We are ready to organize the trade of financial products that are in demand, provided sufficient legal protection is guaranteed”, MOEX said in a statement sent to RBC. However, it also noted that, like any other financial instruments, crypto derivatives must exist within the legal frame in Russia. A MOEX representative also added that from regulatory and technical point of view:
It is faster and easier to implement trading of financial instruments based on cryptocurrency.
Currently, the Central Bank of the Russian Federation seems to be the force pumping the brakes on legalization. At the end of November it saw risks for the global economy in the rise of the “dangerous and uncontrolled” cryptocurrency market. The “formation of a bubble can lead to significant losses for consumers”, it warned. And, of course, cryptos were blamed for money laundering and terrorism financing. But Russia’s desire to be a major player on the world stage, a naughty one sometimes, may be changing minds in Moscow.
Coins Deemed Good for BRICS
With Bitcoin futures trading on two major exchanges in the US, Russia and other oil producing nations might be tempted to price their main export commodity in cryptocurrency instead of petrodollars, according to some analyses. Digital cash offers countries like Iran and Venezuela an opportunity to circumvent Western sanctions, and Moscow is also on the blacklist.
And even the stubborn Centrobank could not resist the temptation to challenge the “single-polar world order”. Last month it came up with the idea of creating a “joint digital currency” for BRICS members and the Eurasian Economic Union states. According to its First Deputy Governor Olga Skorobogatova, a virtual currency is not needed by one country, but a common cryptocurrency for a number of states is very promising:
It makes sense to discuss cryptocurrency on the level of several countries, such as BRICS and the EEU. It makes sense to set one equivalent for all payments.
But what’s really interesting to observe is the Kremlin’s (rare) hesitation on the topic. “In general”, “of course”, and “in the future” were all words used by President Putin in his latest contribution to the Bitcoin debate. While reasoning CBR’s “conservatism” with “there is nothing behind cryptocurrency”, he admitted that “in certain situations it can be a way of paying quickly and efficiently”. “There will be some problems that need to be solved”, Russia’s head of state insisted. With one of his competitors already embracing Bitcoin, Vladimir Putin will ask the Russians for another term in March.
Do you think Russia will legalize or ban Bitcoin after the 2018 presidential elections? Share your opinions in the comments section below.
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Author: Lubomir Tassev