A prominent economic strategist in Russia has proposed the establishment of a state-controlled cryptocurrency bank to transition significant amounts of capital into the formal economy, enhancing public revenue streams in the process.
Emulating Regional Innovations
Igor Petrov, an influential figure in Russia’s economic landscape, has stressed the urgent need for the government to look towards Belarus as a model and consider setting up a national bank dedicated to digital currencies.
In a revealing discussion with the media outlet TASS, Petrov pointed to Belarus’ recent advancements, including comprehensive legislation aimed at creating a thriving infrastructure for digital assets. This follows President Alexander Lukashenko’s initiative to broaden the application of digital currencies in international finance and commerce.
“Our nation must also pioneer its own crypto banking system. This initiative holds the potential to address various pressing economic challenges,” Petrov elaborated, emphasizing that it could redirect countless transactions hidden in the underground economy, potentially recovering vast sums of rubles for the state budget.
The recognition and legalization of digital currencies provide a pathway to formalizing an otherwise shadowy market, contributing to tax revenue and supporting legitimate business activities.
Petrov believes that “transactions within this bank should primarily utilize cryptocurrencies, with deposits allowed solely through the accounts held by Russian residents.”
This framework would also clarify regulations for cryptocurrency miners, who currently lack proper platforms to trade their mined assets, despite a favorable legal environment established last year. With a national crypto bank, miners could effectively engage with local financial institutions for asset liquidation.
Eliminating Financial Shadow Play
Petrov further indicated that establishing a national crypto bank would mitigate fraud and “curb the methods through which nefarious groups financially exploit our citizens for illegal activities, including state crimes.”
He underscored that “criminal networks and foreign intelligence agencies” have been exploiting vulnerabilities in Russia’s crypto regulations, as “crypto exchanges primarily operate by facilitating transactions that often lead to undisclosed personal wallets with associated fees.”
Moreover, Petrov pointed out that recent legislative measures, including the experimental legal regime (ELR), have been adopted in Russia to “formalize cryptocurrency holdings and bring shadow operations into view.”
In a related development, Minister of Finance Elena Chubais presented a blueprint to create an exclusive trading platform for “elite investors” in collaboration with the Bank of Russia (BOR) last spring.
Specifically, this initiative targets individuals or entities with financial portfolios exceeding 100 million rubles or having yearly incomes surpassing 50 million rubles.
However, recent commentary from Finance Ministry representative Sergey Smirnov indicates a need to reassess income and asset criteria, advocating for more accessible thresholds to ensure the initiative’s viability.
