As Russia continues to block the adoption of pro-crypto regulations, a local digital asset advocacy group has called on President Putin to change the government’s stance on market regulation.
The Russian Association of Crypto Industry and Blockchain (RACIB), a popular local group made up of enthusiasts of digital assets and Blockchain technology, published an open letter to President Putin on March 6, urging the Russian leader to address the risks that would represent for the country to ignore the opportunity offered by the crypto industry.
In the letter, RACIB argued that Russia has lagged behind in implementing experimental legal regimes to adopt crypto assets despite enacting its first pro-crypto bill, known as the “Law on Digital Assets,” in mid of 2021.
In November 2022, Russian legislators introduced a series of amendments to the crypto law, one of which called for establishing a national cryptocurrency exchange. According to RACIB, some of those amendments would significantly complicate the implementation of digital financial technologies in Russia as they introduce jail terms for local blockchain developers.
The proposed amendments would provide Russian law enforcement with “a sea of possibilities” to crack down on the local crypto community, RACIB Director General Alexander Brazhnikov told Cointelegraph.
“It would not be easy for local companies operating in the digital asset space to show that they are doing everything to adhere to the framework of Russian law.” said Brazhnikov.
The RACIB has ultimately called for an end to the stance of proposing hostile regulations, as they prevent local businesses from taking full advantage of the potential of cryptocurrencies and could cause the country to experience “direct financial losses.” The RACIB stated:
“The local state of existing policies around the regulation of digital financial assets poses a serious danger that the Russian economy will be left behind not only by countries with similar regulations, but also by more digital asset-friendly countries; this due to the delay in the introduction of new digital financial technologies”.
According to RACIB, one of the biggest risks of being left behind by ignoring the benefits of the crypto industry would be brain drain to other jurisdictions, including Eurasian Economic Union (EAEU) countries such as Kazakhstan and Armenia.
To help Russia change its strict stance towards the crypto industry, RACIB has called on President Putin to establish a working group that includes representatives from the digital asset community to help the government establish the state crypto policy. The group specifically expressed interest in the development and implementation of a cross-border payment system in Russia and EAEU jurisdictions, as well as in countries such as Brazil, India, China and South Africa.
In 2021, RACIB member Yury Pripachkin argued that Russia was doing nothing to regulate the local crypto market.
The news comes shortly after Russia’s central bank reiterated its unsympathetic stance towards cryptocurrencies, as Elizaveta Danilova, president of the Bank of Russia’s financial stability department, has argued on several occasions that legalizing cryptocurrency investments poses a threat. to the well-being of Russian citizens. At the same time, the Bank of Russia has no problem with legalizing cryptocurrency mining and allowing the use of mined digital assets in cross-border transactions.
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