Starting September 1, Russia will enforce strict restrictions on the circulation of crypto assets, allowing only digital financial assets issued within its jurisdiction. Anatoly Aksakov is leading this initiative as part of the government's efforts to control the crypto ecosystem due to increasing geopolitical tensions.

Reasons Behind Russia's Crypto Restrictions

Aksakov explained that the new legislation aims to limit non-Russian crypto operations to support the dominance of the ruble. The restrictions are necessary because cryptocurrency has been replacing the ruble as a quasi-currency in the country. Exceptions will be made for digital rubles and digital financial assets issued in Russia.

The bill will not apply to crypto miners or Central Bank-sponsored test projects operating within an experimental legal framework. Anton Gorelkin clarified that while cryptocurrencies will not be banned entirely, the creation of exchanges outside the legal regime zone will be prohibited.

Internal debates among Russian policymakers are ongoing regarding the regulation of cryptocurrencies. Artem Kiryanov emphasized the need for clear regulations in the digital code to spell out the conceptual framework and law enforcement practices.

In contrast to the restrictive views, Finance Minister Anton Siluanov has advocated for moderate regulation instead of a complete ban on cryptocurrencies. Siluanov believes that regulation is necessary to facilitate the use of cryptocurrencies in both domestic and international transactions.

Discussions within the Russian government suggest a potential inclination towards using cryptocurrencies for external payments, recognizing their potential role in global finance. This approach is also supported by Elvira Nabiullina, the Head of the Bank of Russia, who endorses the experimental use of cryptocurrencies in international settlements.

Recent reports have revealed that Russian entities have utilized cryptocurrencies, particularly USDT, to acquire critical military technology components. For example, Andrey Zverev, a Russian operative, used USDT to purchase drone components in China, bypassing traditional banking channels to avoid scrutiny from sanctions-wary financial institutions.

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