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Russia And Cryptocurrency: The Country’s Leading Bank May Launching Its Stablecoin

In Russia, the government’s attitude towards cryptocurrency has long been ambiguous and was like a roller coaster: bans changed to cautious loyalty and vice versa. Will cryptocurrency be legalized in the country after the adoption of the law on digital currencies?

Cryptocurrency in Russia will be legalized, but there are several “buts”

The law on digital currencies passed by the State Duma, and signed by  Vladimir Putin, the Russian president, on July 31. This law, even at the stage of development, caused discussions of a legal nature due to the presence of provisions that contradict each other. According to DFA on the territory of the Russian Federation, cryptocurrency is not a monetary instrument, but property. Residents of the cryptocurrency cannot pay for goods or services in digital currency, while their right to own crypto-assets legalized at the state level.

By this law, cryptocurrency owners can conduct transactions, accumulate assets, but not use them as a means of payment. Also, without fail, owners of crypto-assets must provide reports on financial transactions carried out using digital currency. The DFA will take effect on January 1, 2021.

Will stablecoins appear in Russia?

Sberbank announced the possible issue of its token, which will be pegged to the Russian ruble. This stable currency should function under the new digital currency legislation. It announced by Sergey Popov, director of one of the Sberbank divisions. He added:

“If the stablecoin initiative is implemented by Sberbank, this asset will be used to conduct financial transactions with other digital assets.”

It is far from the first attempt by the largest Russian bank to join the digitalization of the financial sector. In particular, in May 2018, the bank announced a tender for the purchase of crypto ATMs with a graphic card that will allow tokens to be mined. This news already then became the reason for the spread of rumors about the bank’s desire to join the release of a stablecoin.

Sberbank also became the first government institution in the Russian Federation to use the blockchain for repo agreements (buying or selling an asset at a predetermined price). Crypto enthusiasts saw in this action hope for lifting the ban on cryptocurrency in the Russian Federation, but over time, Sberbank refused to continue using blockchain solutions for financial transactions.

The impetus for the adoption of the law on cryptocurrency and the possible launch of a stablecoin in the Russian Federation was the statement of Vladimir Putin on the need to digitalize the state economy. A qualitatively new stage of development may begin for the crypto industry in Russia.