New Nation Report :
As conflict and crypto become interwoven and moral quandaries emerge, European Central Bank President Christine Lagarde has advocated for swift approval of crypto legislation.
Authorities are concerned that Russia could utilize digital assets to evade sanctions.
The emergence of crypto currencies is still being considered by the US and other Western democracies as a factor in determining whether a prospective ban on Russia from the international payments system known as SWIFT would be effective.
A SWIFT banking embargo, which has been floated as a result of Vladimir Putin’s invasion of Ukraine, is commonly referred to as a “nuclear option” since it would likely delay payments for Russian oil and gas shipments to the West.
Many experts believe that using cryptocurrencies to avoid sanctions is part of Putin’s goal. Although blockchain technology is transparent, crypto-powered markets operating on the dark web, as well as other money-laundering strategies, are being revealed.
According to experts, Russia may be aiming to become the world’s second-largest mining hub.
The country recently backtracked on a proposed crypto prohibition in favor of regulation, with Putin praising the benefits of mining activities in particular.
Europe relies on Russia on 40% of its natural gas supplies, prompting the imposition of Swift penalties. Governments and other organisations seeking to exert pressure on Russia will cling to any additional restrictions they may impose.
Many think that the present proposals will not be sufficient, as Putin’s approach most likely foresaw this scenario. If officials regard cryptocurrency as a tool to help Russia succeed, regulatory frameworks may be implemented more quickly.
Analysts believe Putin may use crypto currencies to circumvent SWIFT, the Society for Worldwide Interbank Financial Telecommunications, located in Brussels. They noted that if Russia is unable to do so, it may increase the viability of cryptocurrency in the eyes of regulators.
President Joe Biden indicated on Thursday that a SWIFT banking ban is still on the table, but that he is debating it for the time being. The United Kingdom has expressed support for the measure, although France and Germany have expressed reservations.
By passing the National Payment Card System in 2014, Russia established the MIR payment system, however making payments outside of Russia through this means remains difficult. The System for Transfer of Financial Messages (SPFS) exists in Russia as well, although it hasn’t grown to the point where it can really compete with SWIFT. Another alternative for Russia would be to use the Chinese Cross-Border Interbank Payment System (CIPS), but the yuan accounts for only around 2% of global payments, and the CIPS system is only 0.3 percent the size of SWIFT, according to Shagina.
According to CoinDesk, a document outlining the ideas for cryptocurrency regulation appeared on a government website Tuesday night. According to the statement, bitcoin purchases are permitted through locally registered and licensed businesses, requiring buyers to authenticate their identities and assist government agencies in tracking transactions.
After several years of operating primarily in the gray zone, this is the latest government to weigh in on the legality of Bitcoin. Some countries, such as El Salvador, have embraced the digital asset, while others, such as China, have outright banned it. Last week, India took another step toward legalizing by slapping a 30% tax on digital asset transfers, which some in the sector saw as a sign that cryptocurrencies were becoming more legitimate.
Although the Russian government’s plan to regulate crypto requires new laws to be passed by Parliament, CoinDesk reports that it is a big move for a country whose central bank had advocated for a complete ban on crypto in late January. CoinDesk reports that the central bank is in favor of the revised strategy.
The new laws are expected to take effect in the second half of 2022 or 2023, according to the Russian newspaper Kommersant. Russia’s new regulatory approach to cryptocurrency contrasts sharply with that of US regulators. Despite the fact that Securities and Exchange Commission chair Gary Gensler has stated that cryptocurrencies should be regulated, few particular restrictions have been imposed. In Moscow City, the economic district around Vostok, cryptocurrency companies have a significant presence. The financial district, which covers roughly a quarter square mile and was built on the site of an industrial park that was demolished shortly after the Soviet Union fell apart, contains at least 50 enterprises that convert cryptocurrencies into cash, some of which have ties to illegal activity. According to cybersecurity and cryptocurrency specialists, this makes it one of the most prominent stations for cashing out digital money in the globe. Binance, the world’s largest cryptocurrency exchange, claims to have “identified multiple accounts and unlawful flows related with” platforms such as EggChange and CashBank, which are both based in Vostok which is part of Russia. Binance said it took down the accounts it detected after informing law authorities to “possible criminal conduct.”
