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Growth of commissions and black market: what do neighboring countries think about the idea to ban bitcoin in Russia

Growth of commissions and black market: what do neighboring countries think about the idea to ban bitcoin in Russia

On January 20, the Bank of Russia brought up for discussion a proposal to completely ban cryptocurrency transactions and mining in the country. ForkLog found out how likely it is that bitcoin investors and miners from Russia might emigrate to Ukraine, Belarus, Kazakhstan and Georgia.

Experts we interviewed from neighboring countries agreed that the initiative of the Russian regulator is counterproductive in essence because it is impossible to ban P2P transactions;

Denis Aleynikov, the developer of the Belarusian legislation on cryptocurrency and senior partner of the law firm "Aleynikov and Partners," believes that the Russian authorities won't be able to achieve control over the transparency of financial flows through a total ban. On the contrary, according to him, mild regulation by the example of Belarus would promote transparency of operations with digital assets.

The expert did not rule out that the Russians could consider their country as a jurisdiction to move to.

"The ban will lead to the fact that black and gray operations will go deeper into the shadows, and legal businesses and fintechs, which could be a growth point, will stop developing in the Russian Federation and some of them will go to Belarus. Now Russian banks through their daughters are present in the market of Belarus and some of them work with cryptocurrencies, as the digital assets are in the legal field here," said Denis Aleinikov;

He said that he provided legal support to BelVEB Bank (part of the VEB system of the Russian Federation) to open a real sector asset tokenization platform Finstor.by in Belarus.

"Stories like this will develop. In Belarus now you can open a crypto exchange, issue any tokens or organize mining without any problems. And there are a lot of advantages - tokens are not securities, a preferential electric tariff was adopted for mining last year and in general any income from crypto is exempt from tax," - added the lawyer.

Some foreign miners now in Kazakhstan, amid recent news, abandoned plans to move to Russia, told ForkLog the president of the local National Association of Blockchain and Data Center Industry Alan Dorzhiev. However, it is too early to say that the Russian mining business will reach out to Kazakhstan;

"I am surprised that the Central Bank and not the Ministry of Economy is dealing with this initiative. In that case, it is obviously a question of monetary policy," Dorzhiev noted;

Overall, he called the news shocking and emphasized that denying cryptocurrencies as a new social phenomenon "definitely does not bode well.

It is very likely that there will be no place for Russian miners in the Georgian market. The founder of the decentralized auction Shelf.Network Lasha Antadze is very skeptical about the prospects of the cryptocurrency industry in the country - already now the connection of additional mining capacities leads to power shortages.

"In mountainous areas, where the state subsidizes the costs, we have a huge increase in consumption and the authorities are powerless to solve this problem," the entrepreneur shared.

Antadze said that at the end of December 2021, residents of the mountain village of Mestia were forced to swear on icons that they would switch off their existing miners. But, as the statistics showed, the consumption has only increased;

Mikhail Chobanyan, the founder of the Ukrainian bitcoin exchange Kuna, believes that the statements of the Central Bank in the long term are aimed at mopping up the market under a certain player who will make super profits from cryptocurrency transactions.

"This player will provide the market with the rules of the game, complying with which, most likely, the same exchangers will continue to work, just the commission for end users will increase and there will be one hundred percent leakage of all information to law enforcement agencies, because probably it will all be roofed by certain authorities," suggested Chobanyan;

However, he was skeptical about the idea of Russian miners' possible relocation to Ukraine, explaining it as too "expensive.

Advisor of Juscutum's business security practice Stanislav Boris does not rule out that the harsh policy of the Russian authorities will provoke the migration of market players to countries with loyal legislative regulation of the industry. Ukraine may also become one of them, due to the final stage of consideration of the law "On virtual assets.

"If an effective platform for the operation of cryptocurrencies with the possibility of legal protection of investors is created, the attractiveness of Ukraine for service providers related to the circulation of virtual assets, participants in this market and miners will increase. This will certainly have a positive impact on the inflow of investment in the country's economy," - summarized the lawyer.

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