Russia Follows India in Recognising Crypto Legally as Currency

GB Market Commentary 9/02/2022

by Marcus Sotiriou

Bitcoin is hesitating around $44,000, whilst fundamentals in the crypto industry grow stronger. Russia’s government as well as the country’s central bank have reached an agreement to draft legislation by February 18th which recognises crypto as a form of currency. This is in contrast to the central bank’s proposal last month, suggesting that miners and other crypto businesses should be banned due to the threat to the country’s financial system. A draft document said that crypto’s use as legal money will only be possible following proper identity checks via the country’s banking system or licensed intermediaries – it will be considered a criminal offense to transact outside these parameters.

This move from Russia comes after authorities in Moscow project the country could earn $13 billion per year in taxes from the Russian crypto market. Furthermore, analysts predict that the Russian crypto market is valued at over $214 billion, which is about 12% of the total value of the global crypto market.

Aside from the huge tax revenue, Russia could be using Bitcoin to hedge against aggressive U.S. foreign policy. I think this will send a message to the United States, and many other nations, that they are falling behind in the crypto revolution, with their ambiguous approach towards regulation. It was only a week or so ago when it was announced that crypto Is legal in India - game theory is playing out in real time.

The U.S. department of Justice announced that they have seized around 95,000 Bitcoins directly linked to the Bitfinex hack in 2016. At the time of the seizure, the Bitcoin was worth $3.6 billion. A couple responsible for the hack have been arrested. FBI Deputy Director Paul M. Abbate said, “Today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead.” In my opinion this is proof that crypto is not a safe haven for criminals, which is a common misconception. The Bitcoin that was seized will be sold on the market, however due to methods like OTC (over-the-counter) deals, this should not affect the market significantly. The funds will be returned to Bitfinex to buy their token, LEO, as a way of repaying customers. LEO rallied 50% immediately on the news.