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Binance Joins Russian Banking Union, Will Head New Crypto Department

Banking

Binance

Exchange

Regulation Russia

Last updated: June 26, 2023 06:54 EDT

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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Last updated:

June 26, 2023 06:54 EDT

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The crypto exchange giant Binance has joined the Association of Russian Banks (ARB), where its Russia and CIS (Commonwealth of Independent States) lead will head a new crypto department.

According to Prime, the crypto exchange has circulated a press release on the matter to major Russian media outlets, where it explained that its Russia and CIS head Olga Goncharova would head the ARB’s newly created Expert Center for Digital Financial Assets and Digital Currencies (literal translation).

The exchange stated that its membership would help “provide a dialogue with federal authorities, legislators, experts in the field of digital financial assets and digital currencies.”

The new “Expert Center” will help compile “professional opinions on the circulation of digital financial assets and digital currencies,” and provide members “with expert and analytical materials” on the topic of crypto, as well as providing “international experience.”

It will also “engage in dialogue” with “federal authorities and legislators.”

Last month, Reuters reported, the exchange’s local leadership suggested that it saw “prospects for new regulations that would boost its business.”

Binance’s Eastern European Director Gleb Kostarev was quoted as stating that the trading platform “hopes for a progressive regulatory approach from Russia that could influence the approach taken by its neighbors.”

He said:

“Our goal is to obtain a license and conduct legal business where the regulation allows.”

The ARB is Russia’s biggest banking collective and was formed in 1991. It currently has 240 members, per its website, but due to a 2017 controversy, it no longer counts the nation’s eight largest banks – including the giants Sberbank, VTB, and Gazprombank – among its number.

In its own release on the matter, the ARB Vice President Anatoly Kozlachkov was quoted as explaining:

“We have extensive experience with interacting with Russian regulators, representing the interests of the banking community. We want to take a more active position on the issue [of crypto] and contribute to the development of balanced regulation. We will take into account the interests of the market and ensure the protection of Russian citizens from [fraud].”

The body added that the Russian “banking community cannot remain detached from the discussion that has unfolded” regulating the “circulation of digital financial assets.”

Separately, Izvestia reported, the ARB has stated that its members “will not have any problems” imposing the crypto-related measures proposed by the Ministry of Finance in a draft crypto regulation bill that is due to be unveiled today.

Izvestia stated that it had spoken to several banks, including the “big eight,” none of whom stated that they saw any problems with the measures. These measures propose creating a system whereby all crypto transactions are made via banking platforms – where they can be monitored for tax evasion and money-laundering violations.

A similar system currently exists in South Korea, where crypto exchanges must strike individual contracts with banking partners. However, in the East Asian nation, banks are also required to accept all associated financial risks, which may not prove to be the case in the proposed Russian system.

The Russian banks and related experts were quoted as stating that it could take “several months to create such a system,” with some claiming that the cost of creating technological platforms would likely be shouldered by crypto-using customers. But banks generally seemed positive about their adoption prospects.

Still, Russia’s crypto D-Day is off to a somewhat slow start. Divisions between the Finance Ministry and the Central Bank (which is still pushing for a crypto ban) have threatened to derail a push to regulate the industry in the coming months, and could still turn D-Day into a damp squib.

But despite the fact that the ministry claimed the bill would be made public today, the Russian cabinet had not even seen the draft crypto legislation as of February 17.

The cabinet’s press service told Tass yesterday: