Russia Should Allow Crypto Settlements in Special Administrative Regions
A Russian senator has advocated for companies registered on two islands to conduct cryptocurrency settlements, without conflicting with the central bank’s stance on crypto payments.
Russia to Trial Crypto Payments in Europe and the Far East
Firms located in these special administrative regions (SARs) — on Russky Island in the Far-Eastern Primorsky Krai and Oktyabrsky Island in Kaliningrad’s Pregolya River — could soon test crypto transactions. The proposal came from Alexander Shenderyuk-Zhidkov, deputy chairman of the Committee on Budget and Financial Markets at the Federation Council, often dubbed the Senate.
As reported by Vedomosti, these entities are viewed as non-residents regarding currency regulations, allowing them to execute transactions outside the jurisdiction of the Russian ruble, which is the sole legal tender per the Central Bank of Russia (CBR).
Currently, while cryptocurrencies aren’t fully regulated, they are categorized as property, though using them for payments within Russia remains prohibited. The CBR allows their use in cross-border transactions under an “experimental legal regime” (ELR).
Shenderyuk-Zhidkov has criticized the slow adoption of this regime, emphasizing the need for swift legislative action. He believes extending the ELR rules to the SARs could attract foreign companies with Russian ties, potentially mitigating capital flight.
By late 2024, about 500 companies were registered in the SARs, which offer flexible tax and currency regulations, including the tech giant Yandex.
Expert Opinions on the Proposal
Mikhail Uspensky, a member of the State Duma’s expert council on cryptocurrency regulation, considers using cryptocurrencies for settlements feasible, predicting it would positively impact Russia’s market. However, he cautions that the proposal could face extensive approval hurdles.
Maria Agranovskaya, Managing Partner at Agranovskaya & Partners, agrees that while the idea is promising, careful consideration of legal frameworks is crucial, with the Bank of Russia’s viewpoint being vital. Notably, a similar proposal was made in 2018 for cryptocurrency trading in these SARs, but it appears that the Ministry of Finance has aligned more with the CBR’s restrictive stance since then.
Comments (0)