One key question facing policymakers is how to regulate crypto. Due to its decentralized nature, cryptocurrency does not fall under the jurisdiction of any one country or regulatory body. This presents a challenge for legislation, as there is no existing framework to control cryptocurrency. Some have suggested that cryptocurrency should be regulated in a similar way to other financial assets, such as stocks and bonds. Others have proposed more creative solutions, such as creating a new class of asset specifically for cryptocurrency.
We suppose this post at Cointelegraph catches no reader by surprise, especially since we just commented a couple of days back on a previous article about the same thing. In this case the central bank of Russia (Bank of Russia) is now saying that crypto legalization is inevitable. We are not deep into the Russian legal system but one would assume that legislation in some form is required first, however, it could be that BoR has the authority to declare crypto as legal under the Russian system.
‘The Bank of Russia, the country’s central bank, has reportedly admitted that cross-border payments in crypto are inevitable in the current geopolitical conditions….The Russian central bank has been rethinking the approach to regulating crypto and agreed with the finance ministry to legalize crypto for cross-border payments, the local news agency TASS reported on Monday….Deputy finance minister Alexei Moiseev reportedly said that the Bank of Russia and the finance ministry expect to legitimize cross-border payments in crypto soon.’
The catch here is that the use case being legitimized has to do with foreign payments only, whereas domestic crypto in still not made for prime time. One can see the clear reason for this logic of course, given that Russia is being partially sanctioned by various countries and payments networks, resulting in limited access to cross-border payment alternatives. We assume domestic crypto payments will be coming as well, but Russia would want to build its own infrastructure first, similar to their effort to create the Mir credit card.
‘Russian lawmakers have been historically opposed to the idea of using cryptocurrencies as a payment method. In 2020, Russia adopted a major crypto law, “On Digital Financial Assets,” which officially prohibited the use of cryptocurrencies like Bitcoin (BTC) for payment purposes. The Bank of Russia has been skeptical about the idea of cryptocurrency payments because it wanted to protect the Russian ruble as the only legal tender in the country….The idea of crypto payments for national trades in Russia surfaced in late 2021. Then, Russian President Vladimir Putin said it was “still premature” to use crypto for trades of energy resources like oil and gas.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.