Just-In: Russia To Legalize Bitcoin; Regulatory Draft Arriving by Feb. 18th

The news in the town is that Russia is preparing for a draft law to legalize Bitcoin and cryptocurrencies this month.

BREAKING: #Bitcoin to be recognized as legal currency in Russia. 🇷🇺

— Watcher.Guru (@WatcherGuru) February 9, 2022

From its plans to ban digital assets to integrate crypto into its financial system, Russia has taken a 180-degree turn on its crypto policy. On Tuesday, February 8th, the Russian government and central government published a report noting that they will soon introduce a crypto regulatory draft by February 18th.

The Russian government is working on an arrangement wherein the distribution of digital assets will happen only through banking systems or licensed intermediaries. Any transactions conducted outside this legal sector will be a criminal offense. Also, there will be heavy fines for illegally accepting crypto as a means of payment.

Interesting one of the major goals of Russia’s crypto policy shall be integrating digital assets in the country’s own financial system. The government said that this will ensure the rights of ordinary private investors while preventing the use of digital assets in financial crime. With this, the Russian government also seeks to keep control over cash flows in the “circuit of credit institutions”. The announcement notes:

Protection of the rights of citizens, in addition to dividing investors into qualified and unqualified, will be ensured through licensing requirements for cryptocurrency platforms. Those, in turn, will be required to have financial airbags in terms of liquidity and capital adequacy.

Russia Eyes A $13 Billion Crypto Market

Previously, the central bank of Russia mulled for a complete ban on the use of digital assets. However, soon the Russian government agencies intervened citing some potential opportunities in this rapidly evolving market.

As per local news publication RT, Russia can collect a total of 1 trillion rubles or $13 billion by regulating and taxing digital assets. Besides, the authorities are looking at any potential opportunities in the crypto mining space. Russia is currently the world’s third-largest Bitcoin miner after the United States and Kazakhstan. It will be interesting to see Russia’s legal standing on crypto with more details coming ahead this month.

Ukraine Vs Russia: Is “Crypto” Key to Rising Tensions?

The decision of Russian Govt. to recognize crypto as a legal currency is surprising considering the threat it poses to its national currency Ruble. Is this announcement a reflection to high adoption of crypto in neighboring Ukraine?

Ukraine is actually one among the top crypto hubs across the globe with roughly $8 Billion worth of crypto transactions annually. As per Chainalysis, Ukraine ranks fourth in the Global crypto adoption index. This is not a surprise considering the low tax and accessibility to highly talented tech pool in Ukraine.

On the other hand, Russia is clearly missing this opportunity. While neighboring Ukraine is attracting foreign investments with its ease of crypto business, Russia is has just started taking crypto seriously.

Ruble (RUB) Loses More Than 7% Amid Crypto positivity

Russian national currency Ruble is down by more than 7% in last two weeks. Whether crypto is a threat to Ruble or not has been a topic of debate for months now. But, rising tensions with Ukraine which is already a Crypto hub combined with crypto legalization seems to be impacting investor confidence in Ruble (RUB).

As reported by CoinGape Markets analysts,

Investors are currently approaching the crucial 100-DMA at$74.65. The selling pressure would further be intensified if the mentioned level gets breached by the sellers.

Source: Coingape Markets

The complete outlook is bearish and the RUB value may further dip in coming days.