Recovery Seed Backup Devices

Russia controls 12% of all cryptocurrencies. And its Government has understood that banning them is a bad idea.

The Russian Government and its central bank have finally agreed on cryptocurrencies: they will regulate and officially recognize them, although it is not yet clear whether as an analogous element to a currency or as a financial asset. This puts an end to months of speculation in which it had even been proposed to ban them in one of the states where most cryptos are mined and owned.

Regulation. Through an official statement, the Russian Government has informed that it is going to regulate the exchange of digital currencies "with strict obligations for all professional market participants and emphasis on the rights of ordinary investors." The aim, therefore, is to control the flow of cryptocurrencies and, above all, to tax it.

As for their qualification, the Russian Government has not clarified it. In its communiqué, it speaks at all times of financial assets. Still, after reviewing the draft of the regulation, specialized media speculate that the Russian Executive wants to recognize cryptocurrencies as an element analogous to common currencies.

Now yes, now no. The Russian Government's announcement is quite striking if we consider that only a few weeks ago, the Central Bank of Russia harshly charged against cryptocurrencies, pointing out that their dissemination had negative effects on society, and proposed banning their mining throughout its territory. The Executive, on the other hand, has always been more in favor of their regulation, mainly for economic reasons.

12%. And it is estimated that Russian citizens hold about 12% of all cryptocurrencies that exist in the world. Or, in other words, about 214 billion dollars in cryptocurrency, which is almost a third of the total market capitalization of the country's companies. A considerable amount of money that, if regulated, would mean enormous revenues for the Russian treasury in the form of taxes.

"The total absence of regulation of this industry, as well as the establishment of a ban, would lead to an increase in the participation of the shadow economy, an increase in cases of fraud and the destabilization of the industry as a whole," the Russian Government justifies in its statement.

Other cases. In this way, Russia is moving closer to the West's stance on cryptocurrencies and away from China's. The Asians banned both mining and cryptocurrency transactions in their country a few months ago and only accepted the use of state-controlled digital assets.

The United States and the European Union (both as a whole and individually by country) are betting more on the path of market regulation through laws that protect investors and taxes that tax transactions as another financial asset. In this regard, the EU is taking things slowly, and the EU regulation it is preparing will not come into force until at least 2024. Therefore, countries such as Spain have already developed national rules to control the exchange of crypto assets.

All states want to control them. So, whether by prohibiting the decentralized market or trying to regulate it, what is clear is that the different countries have opened their eyes and are seeing that the sector has grown so much and handles so much capital that it is necessary to control it. Whether they do not want the State to lose the fiduciary power it has always held, because they sincerely want to protect their citizens from possible fraud, or simply because they are eager to take advantage of it through taxation, they are all trying to tie cryptocurrencies down.

State digital currencies. And while trying to control it, they are also exploring the convenience of creating centralized digital currencies. China is the most advanced in this regard, as the digital yuan has been in operation for some time and has even been introduced as a valid payment method for foreigners participating in the Beijing Winter Olympics.

In the United States, the Federal Reserve recently published a report analyzing the pros and cons of having a hypothetical digital dollar. The document stressed that if this currency is not developed in time, it could lose its supremacy on world markets thanks to its vital money. Europe, for its part, will launch a similar investigation next summer to assess the potential benefits of a digital euro.

Leave a comment

Please note, comments must be approved before they are published