Russia and the cryptocurrency market have had a pretty tumultuous relationship over the years. However, there appears to a positive shift occurring, as Russia as a nation is beginning to warm up to Bitcoin. While Ethereum’s Russian roots are well documented, Bitcoin has been something of an outside entity, but its mainstream presence is steadily increasing. Recent surveys from the All-Russian Center for the Study of Public Opinion (VCIOM) show that over 56% of Russians have heard of Bitcoin.
The growth of interest in Bitcoin, especially as a spendable and tradable commodity, has come about through the nation’s youth. According to the survey, 75% of individuals aged between 18 and 24 have taken steps to learn about Bitcoin, while 74% of Moscow’s population is at minimum aware of the cryptocurrency. What’s key to any cryptocurrency’s growth is notoriety and public acknowledgment, so Russia becoming “Bitcoin aware” is certainly a step in the right direction.
Russia turns the corner
It’s positive to see Bitcoin becoming a more widely discussed commodity in Russia, but it’s clear that the cryptocurrency’s uptake still isn’t widespread. Only a small minority – just 16% – of those that have heard of Bitcoin have taken the step to invest in the cryptocurrency market, with many have the misconception that Bitcoin is illegal in Russia. The takeaway from this is that Bitcoin is still suffering the fallout from the Russian government’s love-hate relationship with the world’s leading cryptocurrency.
Cryptocurrency regulation was teased in Russia for some time, with the turning point coming about during October 2017. Russian officials agreed to a proposal that would see cryptocurrencies be legalized, along with the move to regulate the country’s cryptocurrency market through licensing exchanges. Speaking on issues related to cryptocurrency legalization, Anton Siluanov (Russia’s Finance Minister) said, “The President has spoken of the problems related to cryptocurrencies.
These are difficulties regarding money laundering and cases that are related to identification issues. That’s why we have agreed that the state should regulate the issuing of cryptocurrencies, their mining, and turnover. The state should take all this under control.”
KYC and AML acceptance
What’s clear from Siluanov’s statement is that illegal activity is of legitimate concern to both he and the rest of the Russian government. As such is the case, the decision was made to implement Anti-Money Laundering (AML) and Know Your Customer (KYC) policies, which should prevent cryptocurrency-funded firms from running fraudulently.
Anatoly Aksakov (State Duma’s Financial Markets Committee Chairman), feels that the move to regulate cryptocurrency and implement stricter controls will only be of benefit, “The problem is that we already have a lot of people who acquire cryptocurrencies and they are deceived, we need to give people the opportunity to work legally with it, to protect them as much as possible.”
All miners are welcome
With Russia making such great strides in trying to clear up the cryptocurrency market and increase its appeal to Russian citizens, some believe that Russia could evolve into major cryptocurrency market. The argument is pretty strong, as Russia is opening the door to mining activity on a mass scale. The government is trying to tempt Bitcoin miners to relocate operations from other major cryptocurrency regions – like North America and China – to Russian shores. It’s doing this by promoting its cheap electricity and energy resources, which will likely be seen as cost-effective, especially as the cryptocurrency market continues to expand.
Will Russia kick-start a Bitcoin revolution?
Considering that more than a quarter of all Russians now have some degree of Bitcoin knowledge, Russia is going to great lengths to dispel the “cryptocurrency is illegal” myth. Through impending regulation and local market adoption, the potential for Russia to become a cryptocurrency hotbed is ever increasing.
Should the country’s regulation and mining expansion plans come to fruition, there is nothing stopping Russia from competing with Japan, South Korea, and the US as a trendsetting cryptocurrency market in 2018 and beyond!