Russia’s Need for a Crypto-Enabled Bank
Russia requires a crypto-enabled bank that could assist in curbing illicit transactions and support miners by supplying the necessary infrastructure for them to cash out their earnings, according to a member of the country’s government oversight body.
Evgeny Masharov, a member of the Russian Civic Chamber, which evaluates draft laws, informed the state-owned news agency TASS on Tuesday that Russia ought to take a cue from its ally Belarus and establish a crypto exchange service via a major financial institution.
Addressing Current Issues
Masharov explained that this initiative would “solve a number of current problems,” such as integrating “shadow transactions” into the legal framework while simultaneously “replenishing the federal budget’s income,” and obstructing one of the “channels for financing and recruiting our citizens to commit serious crimes.”
Since early 2022, Russia has prohibited payments through crypto, but it has become more receptive to this sector as it seeks to trade internationally and circumvent the sanctions imposed due to its invasion of Ukraine.
In May, it allowed financial institutions to present crypto-based products to accredited investors and unveiled plans for a Ruble-pegged stablecoin in April.
Support for the Crypto Mining Industry
Masharov contended that a crypto bank could support the nation’s crypto mining sector, as there is currently a lack of infrastructure for miners to sell the cryptocurrencies they have mined.
On January 1, Russia imposed a ban on mining in 10 out of 46 regions for six years and approved seasonal restrictions in key mining areas to help manage escalating energy demands.
However, Vyacheslav Kopylov, a representative of the local crypto mining firm Prostomining, mentioned that in June that despite the restrictions, the industry continues to flourish, and Russia’s Blockchain Forum has increasingly showcased businesses involved in crypto mining.
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Combating Fraud through Regulation
Masharov emphasized that a crypto bank could help mitigate fraud as it would be a regulated entity overseeing all transactions. “In this case, settlements in the said bank must be made in cryptocurrencies, and funds must be credited only through the current accounts of Russian citizens,” he stated.
He further noted, “At present, the main business of crypto exchangers is that cash is credited to the wallet of citizens and a commission is charged for this.”
Future of the Crypto Industry in Russia
In March, Masharov suggested establishing a government crypto fund that would incorporate assets seized from criminal cases.
The crypto sector in Russia has encountered obstacles due to the unclear regulatory environment, but it is still advancing. The total revenue for the Russian crypto market is anticipated to reach $2.3 billion in 2025, rising to $3.9 billion by 2026.
By the end of 2026, the number of crypto users in the country is projected to exceed 44 million, out of a total population of 143 million.
