Anton Siluanov, the Russian Finance Minister, has announced that the Finance Ministry and the Central Bank of Russia will launch a crypto exchange for highly qualified investors. The announcement came at an extended board meeting. Just last September, a law was passed allowing the central bank to make foreign settlements using cryptocurrency as part of a pilot program. In March of this year, the Central Bank requested the Experimental Legal Regime (ELR) to allow qualified investors to make crypto investments. The status of qualified investors includes individuals with deposits of over 100 million rubles or an annual income of more than 50 million rubles. “Together with the Central Bank”, said Anton Siluanov, Russian Finance Minister, “we will launch a crypto exchange for super-qualified investors. Crypto assets will be legalized, and crypto operations will be brought out of the shadows. Naturally, not within our country, but those operations that have been carried out today within the framework of the experimental legal regime”. The Central Bank has further requested that crypto settlements, such as those involving crypto derivatives, be exempt from the ELR for qualified investors. This kind of investment does not include delivering cryptocurrency to the investor, but rather links its value to a revenue and income stream. However, the problem remains that the government still does not recognise digital currencies as a form of payment. The solution to this could be to ban settlements between residents outside the ELM and introduce penalties for anyone who breaks this rule. Ivan Chebeskov, Deputy Finance Minister, said that the current infrastructure for exchanges could be used to facilitate transactions for the ELR. Chebeskov also noted that additional platforms and exchanges could be used, with additional requirements that must be met. All of these suggestions are targeted for the Experimental Regime and form part of a pilot program to test the safety and scalability of digital currencies. Cryptocurrency has become the front line for many trade wars and financial sanctions. Russia’s announcement of a regulated crypto exchange comes as many digital asset markets have been disrupted worldwide. Tether froze $28 million in assets from the Russian cryptocurrency exchange Garantex in response to US sanctions. Deribit, another crypto platform, left the country after being subjected to EU sanctions. Anton Siluanov, the Russian Finance Minister, stated that cryptocurrency could help Russia evade sanctions. Western sanctions have severely impacted many private companies, and they welcome the opportunity to utilize digital assets. Russia further announced, at the last BRICS summit, that crypto could be used to evade sanctions. The Moscow Exchange has expressed readiness to create a crypto derivatives market and claims that the platform could be ready sometime in 2025. Saint Petersburg Exchange has stated that a crypto exchange would provide investors with more options and would contribute to more diverse portfolios. The exchange also said that they wanted to include crypto ETFs. One benefit of crypto ETFs is that they may be traded alongside traditional assets without extra regulation. An ELR-based crypto exchange, therefore, would allow ‘super investors’ to directly trade crypto assets, while retail investors could buy crypto derivatives instead. The ‘super investors’ may need access to crypto so they can evade sanctions. Russia may be limiting retail investors to avoid capital flight. An ongoing pilot study is still underway regarding the use of crypto in Russia . Plans for a crypto derivatives exchange are still in development. Russia seems to be taking a cautious approach to crypto adoption.
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