What does it mean for the world that Russia adopts cryptocurrencies?

Russia adopts cryptocurrencies

The Russia/Crypto drama has been drawing a lot of attention in the news lately. And the noise is well deserved. What started with a call for a total ban on cryptocurrencies, Russia completely changed its stance to accept the future and  accept cryptocurrencies as legal tender.

Policymakers are expected to put in place new legislation or change existing laws to oversee cryptocurrencies as currency, under a framework developed by the Russian government and central bank. According to Russia, the restrictions will stabilize any broader economic effect of digital assets.

Russia, without a doubt, is one of the most influential countries in the world. Not only that, but so far it is the only powerful country in the world that accepts cryptocurrencies as legal tender. This is an extremely important milestone in the history of cryptocurrencies. El Salvador was the first country to recognize Bitcoin as legal tender. Although El Salvador set the ball in motion as an example to embrace the future, the country is still small in its global foothold. A country like Russia, on the other hand, has a great voice throughout the world. And Russia’s endorsement of cryptocurrencies is a big deal and should be recognized accordingly.

Russia adopts cryptocurrencies?

How will Russia’s stance affect the adoption of cryptocurrencies?

Russia’s announcement came just days after India released its budget for 2022. In its budget, the Indian government said it would allow digital investments, albeit with a massive 30% tax. Although the move was praised, many are protesting the massive taxes on digital currencies. 

In a Wednesday newsletter, Anthony Pompliano, founder of Pomp Investments, stated that Russia’s “sympathetic” stance toward cryptocurrencies, including the listing of digital assets on its balance sheet, will “force the hand of the United States.” 

Meanwhile, the US Congress has held hearings on cryptocurrencies in recent months, with industry insiders anticipating greater legislative clarity this year. Last week, a bipartisan measure offered tax breaks for cryptocurrency transactions of $200 or less.

In any case, the United States will closely monitor developments in Russia, which is expected to come up with legislation by February 18 that includes guidelines for taxing cryptocurrencies.

According to the Cambridge University Bitcoin Electricity Consumption Index, the US and Russia have significant financial motivations to put a plan in place, with the latter controlling around 11% of global bitcoin mining and the former controlling 35%. . Following China’s mining ban, both countries saw an increase in their mining farms and hashrate.

If the US takes a positive step towards cryptocurrencies, there is no doubt that many countries in the world will follow. It has become increasingly clear that cryptocurrencies are the way of the future, and the time is ticking for countries to incorporate this new asset class into their broader economic network.