The head of the Russian State Duma Committee for Economic Policy has proposed legalizing cryptocurrencies in order to attract foreign investments including from countries with anti-Russian sanctions.
Proposal to Legalize Cryptocurrencies
The chairman of the State Duma Committee for Economic Policy, Sergey Zhigarev, proposed the legalization of cryptocurrencies at the recent parliamentary hearings in the State Duma on the development of the digital economy, Tass reported on Tuesday.
He believes that it will attract foreign investments, including from countries that have imposed sanctions on Russia. He was quoted saying:
"The legalization of digital currencies as a means of payment can help attract investments from foreign countries, including Western ones with sanctions, so we have an instrument that will help us attract the capital we need today".
“There will be a transformation of the whole banking and financial system,” he told other lawmakers, adding that the intermediaries “will disappear, and we need to be ready for this.”
The deputy also noted that soon large companies with their own cryptocurrencies could enter the market, adding that “we will witness the birth of a new market, free and open. It is to be hoped that Russian companies are involved.”
Government’s Monopoly Challenged
Zhigarev explained at the meeting that, for the first time in history, the government’s monopoly on the production of money is under threat. “This is an irreversible process that is difficult to control, only those cryptos that are backed up by some real assets have their prospects,” he asserted.
Earlier this month, the first deputy chairman of the Bank of Russia, Olga Skorobogatova, called cryptocurrency “a dangerous investment instrument because of high volatility,” RNS reported. She emphasized that from the state’s point of view, cryptocurrencies are “extremely dangerous,” stating:
"The central bank is against allowing the exchange of cryptocurrency in the territory of Russia and will discuss this issue with the finance ministry".
The Bank of Russia is currently working with the finance ministry and the State Duma to establish the legal framework for cryptocurrencies. Meanwhile, the Ministry of Finance has published a draft bill for the regulation of cryptocurrency.
Zhigarev also pointed out that another challenge for the legalization of cryptocurrencies such as bitcoin is “the lack of an infrastructure for transferring cryptocurrency into [fiat] currency (rubles, dollars, euros, etc.) and back,” Tass conveyed. As an example, he said there are significantly more bitcoin ATMs (BTMs) in the US than in Russia. The BTM tracking website Coinatmradar currently shows 38 BTMs in Russia compared to 1,525 BTMs in the US.
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