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Expert Predicts Further Crypto Adoption in Russia – For These Reasons

Adoption Russia

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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 25, 2023

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International sanctions are driving crypto adoption in Russia, a crypto expert has stated. And, the analyst claims, they will likely spur some further growth in the sector.

The claims were made by Yuri Myshinsky, Chairman of the Board of the Digital Transformation Association, and reported by Podmoskovye Segodnya.

Myshinsky noted that “historically,” Russia’s “relationship with cryptocurrencies” was somewhat “contradictory.”

Russian lawmakers are attempting to push through a draft law that would legalize crypto mining in the country – and oblige industrial miners to pay taxes on their earnings. Many observers have commented that this will likely lead to a huge rise in Russian crypto mining.

Several domestic energy producers are keen to set up data centers to mine crypto using associated gas at oil drilling sites. The Ministry of Finance urgently wants to provide Moscow with a revenue boost by legalizing crypto mining.

However, the Central Bank wants to ensure that the tokens mined during these operations are exchanged – and do not “enter the Russian economy.” But the bank will likely struggle to ensure that this is indeed the case.

No Appetite for a Ban on Crypto in Russia

The bank has repeatedly called for a ban on crypto, but pro-industry forces in the government remain vehemently opposed.

Myshinsky explained:

“At first, the government made statements to the effect that cryptocurrencies would never be legalized in Russia. Then came […] compromises, proposing the use of some of the advantages of cryptocurrencies, but imposing regulations.”

The expert suggested that efforts to create crypto sector-related legislation had so far proved fruitless – and that conversations about crypto had ultimately led Moscow nowhere. But, he hinted, a more pro-crypto approach was starting to develop.

Myshinsky said:

“Initially, the [government] stated that crypto could not be used as a unit in internal calculations. But it is now making note of certain exceptions.”

And, he noted, the year is ending with the Central Bank talking about “testing” the use of crypto as a payments tool in “international settlements.” Myshinsky argued that “this shows that cryptocurrencies” are becoming a part of the “international financial” picture for Russia.

And despite the efforts of the United States and the EU, Myshinsky claimed that crypto offers “a lot of potential” for Russian companies trying to circumvent international sanctions.

The expert claimed that crypto “may offset” the effects of “some” sanctions, including banking bans. “After all,” he said, “cryptocurrencies cannot be controlled by international financial institutions.”

Myshinsky concluded that “sanctions” had given Russians “an additional incentive” to pursue crypto-related business, but still had “not become the main reason” why Russians were choosing crypto.