Russia Plans to Set Up Two Crypto Exchanges: Report

The Russian government is exploring plans to establish two new cryptocurrency exchanges in Moscow and St. Petersburg, a local report confirmed on August 23.

These exchanges aim to support the country’s foreign economic activity (FEA). They will primarily focus on facilitating international transactions and creating stablecoins pegged to the Chinese yuan or the BRICS currency, a proposed inter-country currency between Brazil, Russia, India, China, and South Africa.

Russia to Explore Crypto Exchange Business

The two crypto exchanges will likely operate under an experimental legal regime, as Russia’s Russia’s regulatory framework, including Federal Law No. 259, does not fully cover the operation of crypto exchanges. The platforms are expected to use existing financial infrastructure, with one harnessing data from the St. Petersburg Currency Exchange (SPCE) and the other possibly linked to the Moscow Exchange.

These exchanges’ primary focus will be developing stablecoins, digital assets designed to keep a 1:1 peg to a specific asset like national currencies. Although the government targets stablecoin creation, it faces challenges like blockchain compatibility and issues concerning liquidity and security.

According to Yaroslav Schitzle, head of the IT&IP Dispute Resolution department at the law firm Rustam Kurmaev and Partners, Russia’s legal framework currently classifies stablecoins as digital financial assets. Still, the absence of clear rules for crypto exchanges presents a challenge. The experimental legal regime (EPR) recently adopted in Russia is expected to provide a testing ground for these platforms, initially limiting access to a select group of major importers and exporters.

Russia Embraces Crypto Mining

Russia used to ban cryptocurrencies, seeing them as a way to launder money. This hostile stance has shifted to a friendlier outlook as the country now embraces different facets of the crypto industry. This move will likely help the government counter international trade restrictions and reduce reliance on the United States dollar.

Last month, Russia passed a law allowing crypto mining starting November 1, 2024. President Putin approved the law, allowing individuals and companies to mine cryptocurrencies nationwide.

Earlier reports showed that various countries have imposed strict sanctions on Russia, severely limiting its access to financial systems, including cryptocurrencies.