Russia’s Plans to Legalize Bitcoin May Have Hit a Snag

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There’s a new global crypto superpower and its name is Russia. The country led by Vladimir Putin who’s on brink of a war with Ukraine became the third-largest Bitcoin mining centre as of August 2021. It emerged after China’s ban on crypto mining activities, resulting in Russia slotting in as a new mining heaven.

It wasn’t always like that. Just a few years ago, Russia was planning to ban cryptocurrencies. The good news is that its stance shifted, with the country now interested in cryptos.

In just a short time, it achieved a global crypto hashrate of 11.2%, putting it on the third spot behind the USA and Kazakhstan. Due to the emergence of crypto miners in Russia, the conservative country drafted a new law that can potentially reshape the global crypto market.

If it passes, that is. As of today, it’s unclear what the regulations will hold, as things look differently on paper.

What Will the Law Hold?

It’s still unclear what laws Russia will be pushing for when it comes to Bitcoin. At first glance, it was a positive development as the government said it’ll allow crypto purchases through locally registered exchanges. However, it comes with a catch. Those purchases will be traced and recorded with full compliance from the exchanges, diminishing one of DeFi’s greatest strengths – the anonymity.

Without it, many would be hesitant to buy or sell cryptocurrencies. Decentralized finance is built on anonymous transactions, and a law that prohibits that feature defeats the point of cryptos. Don’t get us wrong – it’s great that a major country such as Russia wants to legalize crypto, but if that’s the price to pay, many would oppose it.

According to Russian Deputy Finance Minister Alexei Moiseev, tracing the crypto flow is crucial. The law will allow agencies to identify crypto users, which could be used against them at some point. Moiseev also said that all banks and exchanges will be required to comply with anti-money laundering laws, and would be the only legal crypto entry point for Russian users.

A Surprisingly Major Crypto Market

Russia is always seen as a conservative country with no sense for modern things. However, its plans to legalize Bitcoin trades, even in that form, shows that the crypto market is expanding. Such a big country legalizing crypto would reshape the global market, possibly pushing other countries to accept the change as well.

It would surely move the market in the right direction and will also make Russia a new global crypto power. With the crypto hashrate in the country on the rise, it will become a major player that could send the price upward once again. Bitcoin has been locked in a slump for the past few months, but positive developments from the past few weeks including Russian crypto news have corrected the price a bit.

According to industry sources, Russia has managed to overcome Kazakhstan in terms of Bitcoin mining, even though there’s no official stats to back that up. One thing is for sure – good news are set to follow in 2022, especially if Russia’s plans to legalize Bitcoin and crypto trades are reshaped a bit.


February 16, 2022: • No Comments

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