The Russian deputy finance minister has revealed some details of a possible experiment with domestic cryptocurrency trading. He stressed that the experiment is only at the discussion stage at the Finance Ministry and Bank of Russia, however. The discussion has been underway for months.
Russian Deputy Finance Minister and director of the ministry’s Financial Policy Department Alexei Yakovlev spoke to reporters on the sidelines of a financial forum held by the Expert RA credit rating agency. He said an experimental legal regime was under discussion that would allow certain Russian investors to trade cryptocurrency.
Trading would be for the super-qualified
Trading by super-qualified investors is under consideration. There is no definition of super-qualification, however. Yakovlev said, “Not necessarily banks, but more professional market participants. They could be physicists but with a very, very, very high level of qualification.”
At present, a qualified investor in Russia has to have property valued at 12 million rubles ($133,111 at current rates), but that benchmark will be raised to 24 million rubles next year.
Yakovlev said an experimental legal regime, super-qualified investors, and the elimination of risks are necessary before a proposal can be made to the government. So far, the idea is “in its infancy,” he added.
Domestic trading is not a new idea
The Russian government has long discussed crypto trading. International settlements using cryptocurrency are allowed on an experimental basis under legislation introduced in July. That legislation also foresaw experimental licensing of crypto exchanges or another trading system for “specially qualified” investors.
In September, Yakovlev’s predecessor as Financial Policy Department director Ivan Chebeskov, stated, “We prefer an integrated approach without any experimental regimes because as much as you can experiment, the whole country is basically already doing it.”
By contrast, Yakovlev said on March 5, “Allowing digital currency into domestic circulation is a completely different story and requires much more scrupulous work, which we are carrying out.”
It is legal for Russian citizens to buy and own cryptocurrencies but not to trade them. Cryptocurrency exchanges are operating in Russia now, but they do so in a legal gray zone. State-run cryptocurrency exchanges have been proposed at existing exchanges in Moscow and St. Petersburg.
International trading got a lukewarm reception
International crypto settlement is a poor choice to help with sanctions evasion due to the transparency of blockchain technology, lawyer Alexander Nektorov told Kommersant newspaper. “It will be possible to track the chain of transactions on the blockchain, as well as, in some cases, establish the entity that owns the wallet used for cryptocurrency transactions,” he said.
Nonetheless, Sberbank, VTB and Alfa-Bank, some of the country’s leading banks, have expressed interest in participating in the experiment. State-owned Sberbank also volunteered to be part of the domestic trading experiment.
A Russian Central Bank digital currency (CBDC) has also been eyed as a way to get past the sanctions. Its launch has been delayed. CBDC is “often seen as a way to evade sanctions, columnist Taisiya Romanova told RBC, but “at the moment, there are simply no partners for it.”
Deputy Finance Minister Vladimir Kolychev told reporters on March 4 that Russia is not considering creating a cryptocurrency reserve like the United States. Crypto assets are too volatile, he explained. The National Welfare Fund, a sovereign wealth fund, is made up of 40% Chinese yuan and 60% gold.
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