The Russia / Crypto drama has garnered much attention in the news lately. And the noise is much deserved. What started with a call for a complete ban on crypto, Russia completely switched its stance to now coming to terms with the future and accepting crypto as a legal currency.
Policymakers are anticipated to establish new legislation or change existing laws to supervise crypto as a currency, based on a framework developed by Russia’s government and central bank. According to Russia, the restrictions will stabilize any broader economic effects from digital assets.
Russia, without a doubt, is one of the most influential countries in the world. Not only that, it is so far the only globally powerful country to accept crypto as a legal currency. This is an extremely important milestone in the history of cryptocurrencies. El Salvador was the first country to recognize Bitcoin as a legal tender. Although El Salvador got the ball rolling as an example for embracing the future, the country is still small in its global foothold. A country like Russia, on the other hand, has a big voice around the globe. And Russia backing crypto is a major deal and should be recognized accordingly.
How will Russia’s stance impact crypto adoption?
Russia’s announcement came just days after India released its budget for the year 2022. In its budget, the Indian Government said that it would allow digital investments, although with a massive 30% tax. Even though the move was praised, many are protesting the massive taxation on digital currencies.
In a Wednesday newsletter, Anthony Pompliano, the founder of Pomp Investments, stated that Russia’s “sympathetic” stance toward crypto, including putting digital assets on its balance sheet, will “force the hand of the United States.”
Meanwhile, the US Congress has held hearings on cryptocurrency in recent months, and industry experts anticipate greater legislative clarity this year. Last week, a bipartisan measure offered tax exemptions for cryptocurrency transactions of $200 or less.
In any case, the United States will be keeping a close eye on developments in Russia, which is expected to draft legislation by February 18 that includes guidelines for taxing cryptocurrency.
According to the University of Cambridge’s Bitcoin Electricity Consumption Index, the US and Russia both have significant financial motivations to put a plan in place, with the latter controlling around 11% of global bitcoin mining and the former controlling 35%. Following China’s mining prohibition, both countries saw an increase in their hashrate and mining farms.
If the US takes a positive step towards crypto, there is no doubt that many countries in the world would follow. It has become increasingly clear that cryptocurrencies are the way of the future, and time is ticking for countries to incorporate this new asset class in their larger economic-fold.