Senior executives in the crypto industry explain how Russia’s fears of cryptocurrency and its subsequent payment ban will mean it will lose out
Russia is months away from implementing a bill that officially bans crypto payments within the country. The key architect of Russia’s crypto ban, Anatoly Aksakov, a member of the State Duma, argued that legitimising crypto payments in Russia would “mean the destruction of the financial system”.
The On Digital Financial Assets, or DFA bill, was initiated back in 2018 and is expected to be officially adopted in Russia on January 1, 2021. The bill provides a legal definition of digital assets and legitimises cryptocurrency trading in Russia, however, it prohibits the use of cryptocurrency as a method of payment.
Kostarev outlined that countries like the Netherlands and Venezuela have already adopted crypto payments and people across the world now pay for goods and services in crypto.
“These working solutions are the result of the successful integration of traditional financial services and cryptocurrency projects. And here it should be noted that cryptocurrencies can hardly destroy the financial system, but without any doubt, they can complement it,” he said.
BitGo CEO, Mike Belshe, said that the reduced strength of the ruble after Russia’s 2014 financial crisis had nothing to do with cryptocurrency. He added that Russia could be following a pattern set by countries like Zimbabwe and Argentina, who see alternative currencies as a substitute for their own national currency, rather than a complementary payment mechanism.
“This never works, because the governments are unable to stabilize their own currencies, and the citizens need stability to survive — potentially forcing them to use alternate currencies or black markets,” he stated.
George Payne, co-founder of crypto payment app, GatePay, was of the opinion that cryptocurrency payments could bolster the economy, instead of destroying it, if it is embraced after a well-thought-out and executed policy. He further added that “banning” crypto payments was not feasible as individuals could always find means to make themselves anonymous.
Cryptocurrency has been met with suspicion by most regulators across the world. The ‘strange’ digital currency is seen as a threat to the traditional financial system rather than as an alternative. However, as Waves founder and CEO Alexander Ivanov explained, “Crypto payments are unable to destroy any economy, just as credit card payments in foreign currencies don’t ruin it”.
Written by Harshini Nag