Industry Experts Warn About Russia’s Crypto Iron Curtain

Published: 01/06/2020 | Last Updated: 22/02/2022

Russia’s cryptocurrency industry is fighting against a number of legislations that will it difficult for them to continue operating within the region. Experts warn that if these legislations ever pass, it might compel the superpower to launch a crypto iron curtain in the region.

Several Russian legislators are introducing a number of bills with regards to regulating digital assets, and cryptocurrency in particular. If these bills will be passed, it will make it very difficult for Russian cryptocurrency operators to trade and transact within the country.

Russian Crypto Iron Curtain

Experts estimate that Russia will lose at least $10 billion in tax revenues annually if these bills are passed. Russian cryptocurrency operators are already reaching out to the proponents of these bills in an effort to convince them to drop it. A cryptocurrency lobbying group have also sent a letter to Russian head of Ministry of Economic Development Maxim Reshethikov.

Backers of this proposed legislation claim that Russians can still engage in cryptocurrency transactions provided that the exchange or platform that they use is outside of the country. Moreover, they are also required to report all their cryptocurrency transactions and assets for tax purposes which will be paid in the country.

This means that all cryptocurrency platforms and exchanges located in Russia will not be allowed to operate once the legislation is enacted. This particular regulation will force many operators to move their operation, or at least their domain, outside of the country they operate in

Not only will the government lose tons of tax revenues from cryptocurrency, it will also lose its technological advantage to other competing nations. Cryptocurrency is seen by many as the currency of the future, and an established technological framework will be of great advantage.

If these measures are to be enacted, it will force the country into a crypto Iron Curtain. This means that its cryptocurrency industry will be limited to domestic transactions only. It will also cut its access to the rest of this massive global tech infrastructure.

Coronavirus and Cryptocurrency

As majority of the world reels to the effects of the coronavirus pandemic, the cryptocurrency industry maintains its strong performance. While there are a number of drops in value every now and then, crypto in general maintains a positive growth.

This is an especially good year for cryptocurrency despite the pandemic. As countries impose strict lockdown orders to curb the spread of the virus, people are starting to shift into online e-commerce platforms to procure necessary supplies. This puts cryptocurrencies in an especially advantageous position.

Many market experts believe that the exponential growth of cryptocurrency will force many banks and financial institutions to finally embrace it. On the other hand, even if these institutions will not accept cryptocurrency, they will at least embrace the underlying technology that allows it to function: blockchain.

Many notable industries are starting to embrace blockchain, the technology that allows cryptocurrencies to exist. If this adoption rate continues, many central banks and financial institutions will adopt it as well. This will come to a critical point when the financial industry fully embraces the technology as a whole.