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Russia’s Finance Ministry claims that sanctions have prompted the country to develop its own crypto market infrastructure

Russia has turned its focus to cryptocurrencies in the face of rising international sanctions over its invasion of Ukraine, raising concerns in the West that the government may use them to dodge financial restrictions. Russians are finding it more difficult to cash out their digital possessions as a result of the sanctions.

As sanctions have resulted in restrictions on foreign exchanges for Russian nationals, the incentives to construct the Russian infrastructure for the cryptocurrency market have intensified. Ivan Chebeskov, director of the Ministry of Finance’s Financial Policy Department, made the remark during the International Banking Day conference, according to Tass.

According to the high-ranking official, it has become extremely difficult for Russians who have invested in cryptocurrencies abroad to withdraw their cash and convert them into fiat currency. Foreign regulators are concerned about Russian citizenship, money is being stopped, and new accounts are being rejected. Chebeskov went on to explain:

“Therefore, the motivation for creating the Russian infrastructure for digital currencies, of course, becomes even greater.”

Russians would be able to withdraw their money as well as perform other transactions on a Russian crypto market. A rising percentage of them, according to the Finance Ministry, are eager to transfer their coinage to Russia. Russian users have already been denied access to some trading sites, including as the biggest South Korean exchanges.

The law “On Digital Financial Assets,” which took effect in January 2021, only partially regulates the Russian crypto market. The Central Bank of Russia has proposed a total ban on cryptocurrencies, while most institutions support the Minfin’s proposal to license the business under stringent government control.

A regulation plan based on the ministry’s approach was adopted by the federal government in February. Later that month, the agency introduced a new bill titled “On Digital Currency,” which set forth detailed regulations for the industry. According to the Tass news agency, the Ministry of Finance is also focusing on issues related to crypto income taxation.

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