Bitcoin and altcoins will become “analogue currencies” in Russia. What does this mean?
The government and the Central Bank have reached a mutual agreement on the regulation of cryptocurrencies in Russia. They are now working together to draft a new bill that would recognise crypto as “analogous currencies” rather than digital financial assets. The bill is expected to be officially published as early as February 18. Meanwhile, relatively recently the Central Bank has stated that there is a high probability of a complete ban on Bitcoin, but such a decision is clearly no longer fated to come true. Let’s look at the situation in more detail.
Traditionally, we begin with an explanation. In January 2022, representatives of the Central Bank and the Ministry of Finance spoke out about regulation of the cryptocurrency market. The first one spoke about banning coins and mining, but also wanted to allow coins to be stored on foreign platforms. At the same time, the position of the Ministry of Finance was completely opposite: its representatives opposed the bans and supported transparent regulation of the sector.
The disputes were settled by Russian President Vladimir Putin. At the end of January, he spoke about certain competitive advantages of Russia for miners, after which he asked the representatives of the above-mentioned agencies to come to a common position. Apparently, this has already been done.
Bank and Bitcoin
What will happen to cryptocurrencies in Russia?
According to Kommersant, cryptocurrencies in Russia will be regulated “slightly stricter than the US dollar”. Crypto, fortunately, will not be banned – but its turnover will be under strict state supervision. In other words, transactions will need to be identified in the banking system or with licensed intermediaries. However, no one knows exactly how the identification process will be organized.
Crypto will become “more legal” in Russia
Transactions with value exceeding the threshold of 600 thousand rubles should be subject to mandatory declaration. Such large transactions “in gray” – that is, bypassing banks – will be classified as a criminal offence. In addition, lawmakers will provide sanctions in the form of fines and other penalties for illegally accepting crypto as payment for goods or services.
That said, the crypto market itself has not seen a noticeable surge in trader activity at the moment. This morning, Bitcoin is trading around $43,971, with the $38,000 line as the “fair value” of the major cryptocurrency. This is the opinion of analysts at banking giant JPMorgan, Cointelegraph reported.
Bitcoin’s 15-minute chart
The reason for this expert view is Bitcoin’s volatility, that is, its dramatic changes in value. At the moment, it is almost four times higher than the corresponding figure for gold. And if the volatility drops to at least three times that of gold, then experts will raise the fair value of the digital asset to 50,000.
The most tangible problem for Bitcoin in the future is its volatility and cycles of ups and downs, which will prevent large institutional investors from connecting with it.
That is, experts believe that Bitcoin's property of sharp changes in value is trivial to discourage large market players. We believe this is not entirely true, as many giants have already managed to invest in the cryptocurrency. Accordingly, it all comes down to investors' willingness to take risks rather than any features of BTC.
Growth of Bitcoin
At the same time, the long-term BTC value target for the bank is hovering around $150,000. Accordingly, financiers believe that the cryptocurrency will still reach the aforementioned mark within the next few years.
We believe that the idea of regulating cryptocurrencies in Russia is the right one, but now questions arise about the specifics of this process. However, it is hard to believe in every citizen's willingness to report on their transactions, and it is unlikely that this mechanism will work well from the start. Anyway, now we have to wait for the infrastructure to be in place to do all of the above. We'll certainly know how long we have to wait until next week.
Do you think Bitcoin will be able to renew its highs soon? Share your opinion in our millionaires’ cryptochat. There we will discuss other important developments affecting the blockchain and decentralisation industry.
Related posts
