The Russian minister of Finance came out two weeks ago with a comment about the country’s plans to introduce legislation on governing cryptocurrency assets.
The minister mentioned that in the circumstances of the current economy within the country, the regulation may allow crypto trading once again.
The deputy did mention that it only means that the purchase and selling of cryptos could be legalized, but making payments with digital currencies is a completely different topic for discussion.
Why would Russia do this?
It’s always hard to go back on your word and repeal a law that was installed hastily. Therefore it’s especially weird to see a country like Russia legalize something that it specifically banned not too long ago.
Many are saying that it’s being done because the ban was simply a hasty reaction from legislators that didn’t understand the technology.
However, it’s more likely that Russia wants to somehow syphon the Ruble outside of the country or help its daily traded volume as the currency is becoming way too reactive on simple factors like commodity prices.
The Ruble tends to react to oil prices the most, but the recent decline was facilitated by not only oil prices but the general reduction in economic growth, reduced gas prices and a whole slew of additional sanctions imposed on the country according to Valutnybazar.ru and several Russian economy experts.
How could cryptos help?
Allowing cryptocurrency trading is sure to inject the economy with even more trading volumes and also syphon some funds outside of the country, allowing for a reduction in supply and hopefully maintaining some distance from the falling oil prices in the world.
The reason why Russia wants to stay away from oil and gas prices as much as possible is due to the advancements in the renewable energy sector which have been coming out with several suggestions on moving onto a more eco-friendly and renewable way of maintaining the energy demands of the modern world.
The thing is that they’re definitely going to continue development, and at some point replace oil and gas as the major energy source, ultimately rendering the goods either completely useless or halved in terms of valuation.
Much like the Saudis have started to diversify into different economic sectors, Russia also needs to somehow find alternative methods.
Reigniting the crypto trading extravaganza in the country, which is notorious for hundreds of miners, could potentially allow the government to amend the regulation to a point which would support the Ruble.
For example, all the miners that would potentially transition into cryptocurrency exchanges would demand withdrawals or payments in Ruble, ultimately increasing the demand for the currency and consolidating it at least a little bit in the long run.
However, this decision could quickly fire back as it is not final yet, due to guidelines from the FATF which are definitely being implemented in the legislation.
Regardless of whether or not Russia allows crypto trading again, they’ll still be desperate for alternative methods to shore up their currency somehow.
How would this impact the market?
Right now, most Russian crypto traders are forced to register on foreign exchanges and keep a low profile, which means that their portfolios are nearly not as big as they’re capable of.
Allowing crypto trading in Russia once again, alongside the hundreds of miners is going to infuse the market with tons of trading volume and potentially introduce another Bitcoin dominated market.
What the trading community needs to keep in mind is that there are arguably two coins that would benefit the most from the renewal of crypto trading in Russia. These are EOS and Bitcoin. EOS because of how many Russian hodlers there are for the coin, and Bitcoin because of the overall market trading volume and traction.