On January 20, the Bank of Russia submitted for discussion a proposal to completely ban cryptocurrency transactions and mining in the country. Cryplogger found out what is the probability that bitcoin investors and miners from the Russian Federation can emigrate to Ukraine, Belarus, Kazakhstan and Georgia.
Experts from neighboring countries interviewed by us agreed that the initiative of the Russian regulator is essentially counterproductive, since it is impossible to ban P2P transactions.
With a total ban, the authorities of the Russian Federation will not be able to achieve control over the transparency of financial flows, the developer of the Belarusian legislation on cryptocurrency, senior partner of the law firm Aleinikov and Partners Denis Aleinikov believes. On the contrary, soft regulation, following the example of Belarus, according to him, would contribute to the transparency of transactions with digital assets.
The expert did not rule out that the Russians may consider their country as a jurisdiction for moving.
“The ban will lead to the fact that black and gray operations will go deeper into the shadows, and legal businesses and fintech, which could become a point of growth, will stop developing in the Russian Federation and some of them will go to Belarus. Now Russian banks, through their subsidiaries, are already present on the Belarusian market, and some of them work with cryptocurrencies, since digital assets are in the legal field here,” said Denis Aleinikov.
He said that he provided legal support to BelVEB Bank (part of the VEB RF system) in opening Finstor.by, a platform for the tokenization of real sector assets in Belarus.
“Such stories will develop. In Belarus, now you can easily open a crypto-exchange, issue any tokens or organize mining. And there are a lot of advantages – tokens are not securities, last year they adopted a preferential electric tariff for mining, and in general, any income from the crypt is exempt from tax, ”added the lawyer.
Some foreign miners currently in Kazakhstan have abandoned plans to move to the Russian Federation against the backdrop of the latest news, Alan Dordjiev, president of the local National Association of Blockchain and Data Center Industry, told Cryplogger. However, it is too early to say that the Russian mining business will reach Kazakhstan.
“I am surprised that the Central Bank, and not the Ministry of Economy, is engaged in this initiative. In this case, it is obvious that this is a matter of monetary policy,” Dorjiev said.
In general, he called the news shocking and emphasized that the denial of cryptocurrencies as a new social phenomenon “definitely does not bode well.”
With a high degree of probability, there will be no place for Russian miners in the Georgian market either. The founder of the decentralized auction Shelf.Network, Lasha Antadze, is very skeptical about the prospects for the cryptocurrency industry in the country – even now, connecting additional mining capacities leads to a shortage of electricity.
“In the mountainous regions, where the state subsidizes expenses, we have a huge increase in consumption and the authorities are powerless to solve this problem,” the entrepreneur shared.
Antadze said that at the end of December 2021, residents of the mountain village of Mestia were forced swear on iconsthat they will turn off the miners they have. But, as statistics have shown, consumption has only increased.
The founder of the Ukrainian cryptocurrency exchange Kuna, Mikhail Chobanyan, believes that the statements of the Central Bank of the Russian Federation in the long term are aimed at clearing the market for a certain player who will receive super profits from cryptocurrency operations.
“This player will provide the market with the rules of the game, observing which, most likely, the same exchangers will continue to work, it’s just that the commission for end users will increase and there will be a 100% leak of all information to law enforcement agencies, because, most likely, this will all be covered by certain authorities,” Chobanyan suggested.
However, he was skeptical about the idea of a possible relocation of Russian miners to Ukraine, explaining this with a too “expensive outlet”.
Juscutum Business Security Practice Advisor Stanislav Boris does not rule out that the tough policy of the Russian authorities will provoke the migration of market players to countries with loyal legislative regulation of the industry. Ukraine can also become one of those, thanks to the law “On virtual assets” that is at the final stage of consideration.
“If an effective platform for the functioning of cryptocurrencies with the possibility of legal protection of investors is created, the attractiveness of Ukraine for service providers related to the circulation of virtual assets, participants in this market and miners will increase. This will certainly have a positive impact on the inflow of investments into the country’s economy,” the lawyer summed up.