Russia to Permit the Trading of Digital Currencies on Public Bourses

Russia, through its Central Bank, is mulling the idea of permitting the trading of digital currencies on some of the country’s government-backed stock exchanges. According to a report from Kommersant, the Central Bank of Russia (CBR) held a closed-door meeting with key stakeholders in the financial assets trading ecosystem to discuss the options of admitting cryptocurrencies on their platforms.

According to Kommersant’s interlocutor in the financial market, who took part in the meeting, said: “that the exchanges were in favor of trading with them, brokers mainly supported the concept (since for them this is an expansion in the number of instruments), but information system operators were skeptical about the proposals.”

While the discussions are still at an early stage, experts see the move as a smart way for the CBR to keep control over the nascent asset class, seeing the growing opposition to the move to ban the asset from both the Ministry of Finance and the top tech and political leaders in Russia. Despite the talks starting at this time, experts believe that the digital currencies should have been floated before the end of the year.

Russia, Western Sanctions, and the Place of Digital Currencies

The aftermath of the invasion of Ukraine by Russia is the imposition of numerous sanctions targeted at crippling the latter’s economy in no small measure. 

With financial services giants like Mastercard and Visa already cutting off their services to Russia, and crypto trading platforms like Binance being forced to comply with the 5th rain of sanctions from Europe to stop serving Russian users, the Russian government had to remain flexible in its dealings with the cryptocurrency exchange.

The dynamics have shifted by a very wide margin as the CBR earlier this year was contemplating banning cryptocurrencies. The new measures to incorporate digital assets as a tradable financial instrument are poised to favor the entirety of the cryptocurrency ecosystem irrespective of the motive behind the gesture.

With the Russian government embracing crypto as a lifeline to combat the economic sanctions from the West, the nascent asset class may serve a very pivotal role in sustaining the Russian economy, especially as it relates to international transactions and remittances.