Sunday, November 27, 2022

Real-World Cryptocurrency Use on the Rise in Russia

Real-World Cryptocurrency Use on the Rise in Russia

It may be still a while before the Russian government makes  digital currencies legitimate, but de facto crypto use in the country is on the rise. Hotels that will accommodate World Cup fans have promised to accept cryptocurrencies, a leading state-controlled bank is preparing to launch crypto transactions, and now Russia’s first offline exchange outlet has opened in Moscow.

Also see: A New Russian Cryptocurrency MFC: What Is This?

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There is no timeframe or deadline for the Russian parliament to adopt a long-expected law on crypto, and many have criticized the existing draft for being too restrictive — and, specifically, for failure to actually legalize payments in crypto for goods and services.

But, by the time the law is ready for final discussion, it may already be far behind real life, as the use of crypto in daily commerce is increasing.

Well It’s Technically Not Banned in Russia…

As no regulations on digital assets are currently in place, they are technically not banned, so, entrepreneurs are looking for ways to step up use of cryptocurrencies as a means of payment for various goods and services.

Hotels in Russia’s north-western exclave of Kaliningrad, which is to host several matches of the soccer World Cup this coming summer, announced that their guests will be able to pay for rooms in crypto.

In another move signifying wider spread of cryptocurrencies in Russia, the country’s first offline exchange outlet opened its doors outside Moscow’s Kursky train station.


Although its name – Sbercoin – and green colors used in the logo are too similar to those of the country’s largest, state-run lender Sberbank, it’s still a major step towards wide circulation of cryptocurrencies.

Incidentally, Sberbank’s head Herman Gref is known as an advocate of cryptocurrencies and blockchain, but his bank is yet to take any practical steps in that direction.

However, another Russian lender, Gazprombank, owned by the state-controlled natural gas giant Gazprom, announced earlier this month that it plans to run pilot cryptocurrency transactions, responding to demand for services of that kind from major private customers.

Unlike smaller businesses, the state-run lender is more concerned about the legal status of crypto in the country, so the first transactions are likely to be run through Gazprombank’s Swiss subsidiary.

Declining Ruble Value Is Also a Factor

Meanwhile, another factor that boosted Russians’ interest in cryptocurrencies, was a substantial decline in the value of the national fiat currency, the ruble, against the U.S. dollar, the Euro and many other global currencies earlier this week against the backdrop of new sanctions slapped on Russia by the United States.

In a situation when ruble savings lost more than 10 percent of their value overnight, cryptocurrencies may appear to be a safer haven.

It looks like Russian legislators may soon find themselves in a tough spot. They will have to either come up with a less restrictive version, which takes into account de facto use of crypto in the country, or go rough and ban the nascent crypto payment infrastructure.

Will ordinary people in Russia and around the world adopt cryptocurrencies before their governments? Does it matter? Let’s hear your thoughts in the comments.

Images via Pixabay

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