Russia could consider crypto bank to combat fraud, help miners

Russia needs its own crypto-enabled bank that could help combat illicit transactions and support miners by providing infrastructure for them to cash out their earnings, a member of the country’s government oversight body says.

Evgeny Masharov, a member of the Russian Civic Chamber, which examines draft laws,  told  the state-owned news agency TASS on Tuesday that Russia should follow its ally Belarus in  launching a crypto exchange service  through a major financial institution.

Masharov said the move would “solve a number of current problems,” such as bringing “shadow transactions” into the legal field while also “replenishing the federal budget’s income,” and blocking one of the “channels for financing and recruiting our citizens to commit serious crimes.”

Russia  banned payments via crypto in early 2022 , but it has become open to the sector as it looks to trade internationally and skirt the sanctions it faces for its invasion of Ukraine. 

It has so far allowed financial institutions to  offer crypto-based products  to accredited investors in May and floated plans for a Ruble-pegged stablecoin in April.

Evgeny Masharov, a member of the Russian Civic Chamber, has proposed that the country create a crypto bank. Source: Oprf.ru

Crypto bank could help miners too

Masharov argued that a crypto bank could aid the country’s crypto mining industry, as there is currently no infrastructure for them to sell the crypto they’ve mined.

Russia  banned mining in 10 out of 46 Russian  regions for six years on Jan. 1 and approved seasonal restrictions in key mining regions to help combat rising energy demands.

However, Vyacheslav Kopylov, a representative of local crypto mining firm Prostomining,  told Cointelegraph in June  that despite the restrictions, the industry continues to thrive and Russia’s Blockchain Forum has increasingly featured businesses involved in crypto mining.

A way to combat fraud 

Masharov said a crypto bank could help combat fraud as it would be a regulated institution overseeing all transactions.

“In this case, settlements in the said bank must be made in cryptocurrencies, and funds must be credited only through the current accounts of Russian citizens,” he said.  

“At present, the main business of crypto exchangers is that cash is credited to the wallet of citizens and a commission is charged for this,” Masharov added.

In March, Masharov  proposed creating a government crypto fund  that would include assets confiscated from criminal proceedings.

Russian crypto industry revenue projected to hit $3.9 billion

The crypto industry in Russia has faced challenges due to the uncertain regulatory environment, but it’s still growing.

Total revenue for the Russian crypto market is  projected  to reach $2.3 billion in 2025 and is expected to rise to $3.9 billion by 2026.

The number of  crypto users  in the country is expected to reach more than 44 million by the end of 2026, out of a total population of 143 million.