Russia has decided to cancel its proposed national cryptocurrency exchange in light of the sanctions imposed by the international community due to the Ukraine invasion. The initial purpose of this exchange was to alleviate some of the adverse effects caused by these sanctions.

However, after careful consideration, Russian authorities have shelved the project. As an alternative approach, Russia will shift its focus toward developing regulatory frameworks enabling private companies to establish cryptocurrency exchanges.

Anatoly Aksakov, the head of the State Duma committee on the financial market, revealed this information to local media.

Aksakov stated,

Exchanges will help businesses make cross-border settlements, restrictions may begin to be imposed on them. At the same time, new organizations will appear. We agree with this concept in the Ministry of Finance. Market participants are confident: a new mechanism will help reduce sanctions risks and the likelihood of cyber attacks, as well as support competition.

Russian Central Bank Set to Implement New Regulations for Crypto Exchanges

According to the report, the proposed cryptocurrency exchanges in Russia would be subject to regulation by the country’s Central Bank. It is anticipated that the Central Bank will introduce new regulations governing the operations of these exchanges before the end of the year.

The current emphasis of Russian authorities appears to be on prioritizing compliance. This sentiment is echoed by other lawmakers in Russia who share the view that launching an exchange without established rules would be imprudent. Hence, there is a cautious approach toward proceeding with the exchange until clear regulations are in place.

The Ministry of Finance in Russia has expressed its support for the new strategy, despite its initial opposition to the concept of a national cryptocurrency exchange. While specific details about the crypto regulation remain limited, Russia has actively taken broader measures to enforce regulations within the cryptocurrency market.

As Russia continues to take steps in this direction, more information regarding the specific crypto regulations will emerge in due course.

Russian crypto companies advocate establishing a regulatory framework instead of pursuing a national cryptocurrency exchange.

Their rationale behind this approach is to mitigate risks, enhance cybersecurity measures, and address concerns related to market dominance. In this regard, suggestions have been made to limit access to the cryptocurrency market for “unqualified investors.”

Oleg Ogienko, the Director of Government Relations at BitRiver, highlights the risks of a single national cryptocurrency exchange, emphasizing the need for multiple players to mitigate sanctions, cyber-attacks, and market dominance.

In order to ensure the safety of traders, regulations will be implemented to control access to these exchanges. Furthermore, foreign companies operating in Russia will be subject to new regulations aimed at protecting platform security and user data.

Ivan Gostev, the Commercial Director at GIS Mining, supports regulating private entities in the crypto industry to promote competition, innovation, and user protection. He agrees with Ogienko on the significance of platform regulation for safeguarding user interests.