News Update: BTC and Crypto Assets to Be Treated as Currencies in Russia–Crypto Business Show Ep. 7
Video Transcript:
Rob: Hello everybody welcome to the crypto business podcast brought to you by TokenMinds.co. I’m your host Rob Eijgenraam, and I have in the podcast with me today Dev and Reinhart. Today we’re gonna talk about the news published in the blog crypto about Russia that is mentioning the following title Russia set to recognize crypto as a form of currency report and it reads authorities in Russia are set to recognize digital assets as a form of currency according to the local news reports Russian newspaper commercials that the government and the bank of Russia have reached an agreement on how to regulate cryptocurrencies they are now preparing a draft law which will define crypto as an analog to currencies rather than digital financial assets the report first stated that it will only be possible to use them in the legal sector with full identification for the banking system through iss intermediaries the news comes just weeks after Russia pushed for a blanket ban on crypto in January arguing the speculative nature of the industry as a part of the proposal the central bank also said that financial institutions should be stopped from facilitating crypto transactions separate reports suggest that president Putin is backing plans for regulating the county’s crypto mining industry for further details from today’s commerce sound reports suggest that crypto transactions of over six hundred thousand rubles roughly eight thousand dollars will have to be declared or will constitute as a financial as a criminal fine. Fines will also be levied on those who legally accept crypto as a means of payment so what do you guys think of this news?
Dev: Right so right off the bat here Rob and Reinhart, again very close on the heels of another brick nation coming out publicly announcing that they were gonna accept and regulate cryptocurrency right so both Russia now and India announcing that they’re gonna instead of announcing a complete blanket ban on cryptocurrencies now will acknowledge the use of cryptocurrencies so it’s quite the turnaround right just a month ago I think it was January 20th where we had some sources telling us about how there was a conflict between the central bank and the ministry of finance where the central bank of Russia wanted to announce a ban as it felt a threat to the use of the ruble for not just local economies but also international trade the ministry of finance recognized the fact that cryptocurrency was already being used for whether white or black money and now has received support in that regard so for sure I think the sentiment is positive in that you know the acceptance now facilitates and allows for the use of cryptocurrency for settlement when it comes to international trade investment assets using them as for making transactions obviously under the purview of the Russian government and and banks right i think it it opens up an avenue for taxation purposes as well so what my initial thoughts were that obviously this is a group of countries coming out publicly announcing that one after another we read something about Brazil a couple of weeks ago india last week russia this week.
Reinhart: So also Indonesia last week.
Dev: I guess, sorry to say that again
Reinhart: Oh yeah and I want to add just yeah like Indonesia also last week like yeah they just like announced the legality of the blockchains I mean cryptocurrency in Indonesia as well so that’s an issue right more countries I mean.
Dev: Right so it seems like countries don’t want to be left behind on this chain of the use and adoption of blockchain technology so not just is there going to be now the use of cryptocurrencies as a form of hedging against equity markets and bond markets but also now a major push for the use of blockchain blockchain-based apps for innumerable use cases right but there you know there are some caveats that I think we should expand upon where Russia has publicly stated that even though regulation kicks in next year there will be fines imposed for amounts transacting more than eight thousand dollars right so that’s roughly 600 thousand rubles so anything north of eight thousand dollars would be considered illegal and you’re liable for fines among other things and consider criminals sorry yeah right.
Rob: I think it’s politely you know what they’re saying is basically well first of all they’re saying you can only transact through those licensed intermediaries with full krc and stuff like that and if the transaction is higher than 8000 us dollars you need to file like some special docents for that which is also the case in other financial systems right above 10000 US dollars you need to somehow submit some kind of filing so that’s I think that’s following the normal fiat regulations I guess.
Dev: Gotcha okay so again normalization of the use of cryptocurrency but i want you to know there’s one article that just came to light to me and I wanna share that with you everybody here is that when you look at the population of users when it comes to who is actually using cryptocurrency right or where is the largest percentage of users of cryptocurrency it’s really interesting because one notices that here on this article by tinmagazine.com India usa Russia, Nigeria and Brazil comprise the top five countries of actual crypto owners so and again India is 7.3 percent of the whole population that’s 700 i think 700 million approximately usa Russia too 11 of the whole population and of those crypto owners and so on and so forth Indonesia is part of that list as well so it’s it makes sense because a few years ago right and this is tin magazine talking about how India has two times more crypto users than usa uk, and Russia combined but still Russia now in the news it just goes to show that use cases and adoption of cryptocurrency in the bric countries is coming to light right? Another article here is that SMBS across nine markets Brazil, Canada, Germany, UAE, United States, Russia, and Singapore right you’re going to be seeing huge adoption of small-medium businesses using cryptocurrencies this is in the financial express right 59 of small businesses that they plan to shift to using only digital payments so it’s kind of interesting how obviously adoption is becoming more mainstream and regulation will now give confidence to businesses worldwide that settlements will be taking place on time they’re very following on the blockchain and so on and so forth.
Rob: Yeah thanks for sharing that Dev, I appreciate it. What do you guys think of you know this comparison between what happened last week with India and then this week with Russia right it’s slightly different because obviously India as far as I understood they do consider it as like digital virtual assets you know one of the things was that they kind of left the tax on that as well whereas Russia I heard some conflicting news about that it’s it is about tax partly but then if you are accepting this as currencies I would assume that that’s not so very tax efficient for them so what do you guys think what is the reason for Russia to do this move and also this internal conflict that they seem to have right between the central bank first trying to ban it and now all of a sudden and of course Putin then saying something like that he wants to kind of keep it but regulate it and then eventually it looks like that’s the direction they go for so what do you think there’s no motivations are of Putin to do this.
Dev: Right if Reinhart, if it’s okay I’ll go, so I think when you look at the brick countries right whether it’s Brazil Russia India China there’s always been from an economic standpoint question about how friendly it is to do business with these countries what are the challenges that one faces and all these countries have a deep layer of shadow finance, shadow banking, and shadow business rate, where a lot of it goes unrecognized and whatnot so on the one hand that we have you know things moving towards greater transparency with the use of blockchain and blockchain related payment systems again cryptocurrency or another form of digital coin and on the other hand you’ve got leaders of these respective nations trying to see and gain control or retain control again speculation for sure but one could assumee that it’s in a way to maintain that authority and maintain a grip over the oligarchs that still continue to one way or another rule economics in Russia right you still have those the five-six families that really drive business in Russia right but at the end of the day Putin is still the man who lays down the law so it’s really interesting to see that dynamic play and that relationship unfold and again I really appreciate you bringing up this concept of analog currency because it requires it begs for more research we will wait and see what they really mean by that as far as the tax implication and how that how that plays out where India has very clearly announced 30 percent tax rates on an analog currency and not classifying it as a digital asset we wait and see what implications will be when it comes to taxation on that currency yeah.
Rob: Yeah that’s an interesting take from you Dev. I haven’t really realized it as well that what you’re saying about this oligarchy in Russia that definitely one like if you go into it and I’m definitely not an expert on this in any way but what I’ve read in the news as well is that you know there are some political things playing now between Europe the west and Russia and of course then it comes up with those kinds of sanctions that especially USA can lay on Russia and they can freeze the bank account of those people in the Russian oligarchy stuff like that which makes them vulnerable so it kind of makes maybe sense as you’re mentioning to have these digital currencies that theoretically no one can influence it’s like decentralized so it’s kind of almost ironic that even in some governments this fact of decentralization can be in their benefit it’s not just for kind of civilians that want to be not like kind of to rely on like you know government stuff like that so interesting take yeah. Thanks, everybody for listening, and see you next time bye-bye.
Dev: Thank you.