Russia could evolve into the next major Bitcoin market, as the government continues to encourage Bitcoin mining and moves closer towards regulating its cryptocurrency exchange market.
Earlier this week, Cointelegraph revealed that Russian President Vladimir Putin approved the launch of CryptoRuble, a cryptographically-secured state-issued national digital currency.
Minister of Communications Nikolay Nikiforov said:
Several analysts have speculated that the launch of CryptoRuble would likely lead to a nationwide ban on Bitcoin and other cryptocurrencies. However, according to Putin, that is not the case and the Russian central bank has plans to regulate Bitcoin and cryptocurrencies.
In a statement released by the Kremlin, Putin explained that similar to other countries such as the US, Japan, and South Korea, Russia needs regulatory frameworks to oversee cryptocurrency trading and activities. However, he has no interest in banning digital currencies. Putin stated:
This is a big change from a week ago, when Putin condemned Bitcoin for its potential criminal uses.
Russia is eyeing the regulation of Bitcoin and cryptocurrencies instead of an outright ban in order to retain some measure of control. If Russia bans cryptocurrencies, most trading activities will move to over-the-counter (OTC) markets and peer-to-peer (P2P) trading platforms, which are extremely hard to censor and regulate. With trading platforms equipped with Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, the Russian government can prevent the usage of cryptocurrencies such as Bitcoin and Ethereum in illegal activities.
The Chinese government also recently issued a statement which implied that it is planning to introduce a national licensing program for cryptocurrency exchanges, as it fears cryptocurrencies being associated with criminal activities.
In September, Alexander Drozdenko, the governor of the Russian Leningrad region, encouraged Bitcoin miners and mining facility operators to establish digital currency mining centers in the region to promote and encourage others to participate in the global Bitcoin mining industry.
Local news publications including 47News reported:
Drozdenko also told local reporters in a press conference covered by Bitcoin.com:
If Bitcoin mining and cryptocurrency exchange markets in Russia demonstrate an exponential rate of growth supported by regulatory frameworks released by the Russian government, Russia could evolve into the next major Bitcoin market in the long term.