Russia Gets Serious About Crypto, Plans State Exchange Rollout

Russian authorities intend to launch a cryptocurrency exchange for the country’s highest-net-worth investors only, a change of direction for the country in handling digital assets.

Central Bank Relaxes Stance On Digital Currency Market

Finance Minister Anton Siluanov announced in a ministry board meeting that his ministry will cooperate with the Central Bank of Russia to open a cryptocurrency trading platform. This exchange will have an experimental legal framework and cater to only “highly qualified investors.” Siluanov explained that this is meant to “legalize crypto assets and bring crypto operations out of the shadows.”

The announcement represents a significant shift in Central Bank policy, which has long opposed the adoption of cryptocurrency. The bank had put forward a proposal on March 11 to the government to allow for cryptocurrency trades by a new set of investors who are very well off.

Only The Ultra-Wealthy Need Apply

According to reports, the government is set to limit access to this new crypto exchange to persons of outstanding wealth. The Central Bank suggested that “highly qualified investor” status would be reserved only for those whose investments in securities and deposits are over 100 million rubles (around $1 million), or whose incomes for the last year were in excess of 50 million rubles (around $500,000).

Osman Kabaloev, Financial Policy Department’s Deputy Director in the Finance Ministry, told the Blockchain Forum that the qualification requirements are still up for debate. “We are still debating these matters. And we also expect active discussion with deputies,” he said, adding that MPs have shown interest in taking an active part in the development.

Experimental legal framework (ELF) for cryptocurrencies started forming once a law to allow the Central Bank to test a pilot for foreign settlements using cryptocurrency went into effect last year on September 1.

Deputy Finance Minister Ivan Chebeskov suggested in March that current exchange infrastructure could be used as the basis for cryptocurrency trading under the experimental model. He also spoke about opening up for new players and trading platforms, but subject to certain licensing conditions. Chebeskov warned that the experiment would not start for at least another six months.

In spite of this opportunity for high-net-worth investors, the Central Bank is still against cryptocurrency being accepted as a means of payment in Russia. The bank has recommended prohibition of settlements among residents in cryptocurrency outside the test legal framework and wishes to institute sanctions for infractions.

Now, Russian citizens are allowed to buy and own cryptocurrency legally but are not allowed to use it for payments in Russia. Russians have to rely on foreign exchange platforms since there is no centralized Russian crypto exchange.

Featured image from Unsplash, chart from TradingView