Russia's crypto industry is facing regulatory hurdles and hostile responses from key government institutions. Now, a prominent local group has requested President Putin meet with leaders of the industry to discuss their demands.
In an open letter, the Russian Association of Crypto Industry and Blockchain (RACIB) urged President Putin to take action. They asserted that Russia would lose its edge in the global digital economy if it did not introduce experimental legal regimes for crypto adoption.
The RACIB Calls for a Change in Policy
A Russian crypto group has requested President Putin convene a summit to address industry needs. The Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (RACIB) believes that "regulatory change" is necessary for Russia to become a world leader in digital payments and accounting systems.
In a letter to Putin, the RACIB urges the president to convene a special meeting on these topics and include cryptocurrency stakeholders. Additionally, it calls for creating a working group with the purpose of designing an innovative pilot project with digital financial technologies. Furthermore, cross-border payments should also be discussed during this conversation.
The RACIB also wants Russia to overhaul its regulatory framework, such as laws regarding financial assets and digital currencies. It believes the current policy is "extremely conservative and prohibitive," potentially hindering the country's capacity to capitalize on emerging digital technologies.
Additionally, it states that proposed amendments to Russia's digital financial asset laws make it harder for businesses to adopt digital technology. According to the group, current state policies prevent Russian companies from capitalizing on the potential of new financial instruments, leading directly to direct losses for taxpayers.
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Russia's main ESPO crude exports are expected to reach record levels this year and S&P Global projects the country to maintain its output level for at least the next three years. However, Yergin warned investors that production may slow down in coming months as Russian oil fields reach capacity limits.
The RACIB’s Open Letter to President Putin
Recently, RACIB (Russian Association of Crypto Industry and Blockchain) issued an op-ed in the Russian newspaper calling on President Putin to meet with a group of digital asset enthusiasts and discuss their top demands. Yury Pripachkin, Chief Executive Officer at RACIB, described current cryptocurrency regulations as "extremely conservative and prohibitive," potentially hindering Russian companies from taking advantage of advanced financial technologies that could boost productivity or create new jobs.
The RACIB's op-ed is part of their ongoing campaign to convince the world's largest cryptocurrency exchanges to adopt blockchain technology, which they refer to simply as "blockchain." According to this analysis, a well-crafted blockchain infrastructure will bring about increased efficiency in key areas such as finance, supply chain management and healthcare. It also mentions that this initiative will save the country money by forgoing a central clearinghouse, leading to reduced fees and improved customer service. One of RACIB's primary goals is to create an open platform that promotes interoperability throughout the crypto ecosystem and beyond. They are currently working on this project with prominent global players such as Binance - world's largest crypto exchange by volume - and Coinbase from UK, one of Europe's biggest crypto exchanges.
The RACIB’s Call for a Cross-Border Payment System
In an open letter addressed to Russian President Vladimir Putin, the Russian Association of Crypto and Digital Assets (RACIB) urges authorities to meet with industry representatives and discuss their demands. They contend that current state policies prevent Russia from becoming a world leader in digital payment and accounting systems implementation.
The group highlights a lack of common governance between nations, making it difficult for governments to address market failures. Furthermore, cross-border payments often lack adequate or nonexistent infrastructures, making them costly and risky transactions.
Russia's leadership is looking to blockchain technology as a means of creating an alternative international settlement system that doesn't rely on banks or outside interference. President Putin stated in an interview with Sberbank that such a network would be safer and more convenient for users.
As Russia tightens sanctions against Western nations, their currency, the ruble, is losing ground in international trade. According to a report by Bank of Russia, payments for exports using "toxic" currencies like dollars and euros fell to 48% of total trade in 2022 from 87% at the start of this year.
Additionally, reports indicate Russian lawmakers are considering amending the country's cryptocurrency laws in order to legalize mining crypto tokens and their sale on the country's national exchange.
Russia's attitude toward cryptocurrency in the past has been largely negative; in September, Russian Prime Minister Mikhail Mishustin set a December deadline for reaching consensus on policies regarding crypto mining and cross-border transactions.
The RACIB's call for a meeting is an important step toward satisfying the industry's growing need for faster, cheaper and more secure international payments. As banks struggle to keep up with shifting consumer preferences for cross-border digital payments, alternative solution providers offer better alternatives that can boost revenue growth while cutting costs for clients.
The RACIB's call for an independent blockchain-based settlement network has broad ramifications for the industry in Russia and beyond. They believe that creating a cross-border payment system will reduce costs, expedite processing times and enhance transparency for consumers - benefits they outlined in an open letter sent last month to President Putin.
The RACIB’s Call for a Common Position
The Russian Crypto Industry Association (RACIB) has sent President Vladimir Putin an open letter, asking for him to convene a summit to address industry needs and demands. They contend that Russia could lose ground to other countries if it continues on a conservative approach with financial technologies.
In its open letter, RACIB stresses the need for a comprehensive regulatory framework in Russia for cryptocurrencies and related technologies like blockchain. They believe Russia can become a world leader in digital payments and accounting systems if allowed to embrace cryptocurrency adoption.
Recently, the country has made significant efforts to embrace cryptocurrency, with crypto mining recently being legalized. Nonetheless, it remains uncertain if the government will approve of crypto exchanges or allow them to be utilized as payment systems.
Early this year, the Bank of Russia proposed an outright ban on trading and mining cryptocurrencies due to their "threat to financial stability." However, the Finance Ministry objected to this measure, prompting President Putin to urge authorities to reach consensus.
However, Russia still conducts almost half of its trade in currencies from countries that imposed sanctions against it for its involvement in Ukraine. This leaves Russia with less room to accommodate new currencies and also restricts its ability to make international payments.
The association urges the president to form a working group on digital financial technologies, such as cross-border payments that are relevant for Russia in light of war-provoked sanctions. Furthermore, this group should include crypto stakeholders in its discussions.
At the meeting, one of the key topics that will be discussed is how to bolster security within the crypto industry in light of potential threats from hostile states. According to the association, they have seen an uptick in cyberattacks against their members, leading to losses across all industries and sectors of economic activity.
Given the cybersecurity threat, RACIB suggests Russia create its own national crypto exchange to safeguard the industry from threats. This exchange should have its own legal identity and distinct banking system separate from the federal system.
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.