In a bid to increase its foreign economic activity (FEA), Russia plans to launch two major crypto exchanges in the region: one in Moscow and the other in Saint Petersburg.
According to the reportThis initiative highlights Russia’s “strategic” move to integrate digital assets into its economy. It focuses on the creation and use of stablecoins pegged to the Chinese yuan and the BRICS basket of currencies.
As reported, the aim is to “promote” economic cooperation among the BRICS countries (Brazil, Russia, USA, China and South Africa) while also advancing the country’s “de-dollarization” efforts.
2 Russian Crypto Exchanges Coming: Details
The Russian initiative to launch new crypto exchanges aims to create a new platform for digital transactions, especially now that international sanctions are financial transactions of the country on the world stage.
One of these exchanges will likely use the existing infrastructure of the St. Petersburg Currency Exchange (SPCE) to support foreign economic activity.
The other, based in Moscow, could either build on the current setup of the Moscow Exchange or be developed as an entirely new entity within a controlled legal environment.
The emphasis on stable coins—cryptocurrency tied to a reserve asset such as national currency—is a sign of Russia’s intention to develop a “more robust” financial system that reduces its dependence on the US dollar.
Despite these ambitious goals, several obstacles could hamper the effective rollout of the Russian crypto exchange project. One major issue is the technological challenge of integrating stablecoins into the Russian blockchain infrastructure.
Oleg Ogienko, CEO of BitRiver, noted that stablecoins are more like cryptocurrencies than traditional financial assets due to their legal features.
This similarity could lead to “convertibility, liquidity and security complications,” which could jeopardize the “smooth” adoption of stablecoins within Russia.
Challenges and Risks in Implementing the Russian Crypto Exchange Initiative
In addition to technological challenges, regulatory issues also pose significant barriers. Russian Federal Law No. 259, which regulates the issuance and circulation of digital assets, provides the legal framework for digital financial activities.
However, this legislation does not explicitly cover the establishment or regulation of crypto exchanges. Yaroslav Schitzle, from Rustam Kurmaev and Partners, pointed out the lack of a clear and coherent legal structure for launching and operating crypto exchanges under current Russian law.
The recently introduced Experimental Legal Regime (EPR) could provide a legal basis for these new exchanges, but it has yet to be tested in this specific context.
The rollout of these cryptocurrency exchanges is expected to be gradual, with access initially granted to a limited group of users, such as subsidiaries of major exporters and importers.
Mikhail Uspensky, a member of the State Duma Expert Council on Cryptocurrency Legislation, noted that it is unlikely that small and medium-sized enterprises or individual users will get unlimited access at the initial stage.
He also warned of the potential risks associated with sanctions, particularly the transparency inherent in blockchain technology, which could expose transaction data and lead to serious consequences for those involved.
Furthermore, there is skepticism about the appeal of these domestic platforms. Nikita Vassev, founder of TerraCrypto, questioned the attractiveness of the new exchanges, suggesting that they would only be used by those who have no other alternatives.
Vassev stated that most users will likely continue to prefer established, globally recognized trading platforms unless no other options are available.
Main image created with DALL-E, chart from TradingView