Russian Lawmakers Abandon State Crypto Trading Platform While Also Planning To Use Crypto Exchanges To Settle Cross-border Transactions

iz.ru has reported that according to Anatoly Aksakov, head of the State Duma committee on the financial market, the plan to create a national cryptocurrency exchange has been abandoned by authorities. Instead, regulations will likely be implemented for the establishment and operation of such exchanges, as they play a crucial role in facilitating cross-border settlements for businesses. Aksakov also mentioned the possibility of introducing restrictions on these exchanges. The Ministry of Finance shares this perspective. Market participants believe that this new approach will reduce the risks of sanctions and cyber attacks while fostering competition.

The creation of a national cryptocurrency exchange and platforms for digital currency declaration, conversion, and trading were discussed at the end of last year. A draft amendment to the law "On Digital Financial Assets" was being prepared, expected to be introduced in the second quarter of 2023. Anatoly Aksakov, head of the State Duma committee on the financial market, mentioned this in an interview with Izvestia.

Instead of a traditional stock exchange, the focus will be on organizations facilitating interaction between exporters, importers, and cross-border settlements in digital currencies. Market participants supported this initiative to minimize sanctions risks, cyber attacks, and market dominance. Licensing and regulation of financial reporting, anti-money laundering measures, and data protection are crucial for these platforms. Qualified investor connection and special requirements for foreign exchanges operating in Russia are also suggested.

International cross-border transactions thanks to exchanges

Such platforms will enable national companies to conduct international settlements with cryptocurrencies amidst sanctions. However, there is a risk of new restrictions. Western players are interested in cross-border transactions, and legal exchanges could emerge as early as 2024. The first organizations are expected to be created a few months after legislation adoption, with control by the Central Bank or a self-regulatory organization. Transparency, financial stability, and trustworthiness are essential for these platforms to handle client funds effectively.

Evgenia Burova emphasized the significant turnover potential of the market, reaching trillions of rubles in crypto trading. She highlighted that numerous countries already accept cryptocurrency payments, envisioning a system where companies buy digital currency on an exchange and conduct transactions with counterparts through it.

Stanislav Rozhdestvensky, Director of Strategic Development at CoinKit LLC, explained that while cross-border transfers cannot be hidden, they cannot be blocked either. Transparency of major cryptocurrencies allows anyone to view transaction records, but internal calculations within an exchange platform can still be concealed. However, the blockchain lacks blocking functions, enabling unrestricted payments.

To maintain anonymity, the introduction of limited-access cryptocurrencies may be considered, preventing misuse by criminals. This idea gives rise to the concept of a centralized interstate cryptocurrency, aiming to balance privacy and security, as suggested by the expert.

Resources:

iz.ru