Russia Drafts Bill to Create Offshore Companies to Trade Cryptocurrencies

The Russian Ministry of Finance is drafting a bill to allow the creation of offshore companies to trade cryptocurrencies. This follows the bill which the ministry recently published on the legal framework for cryptocurrencies.

Crypto Trading Offshore

“The Ministry of Finance proposed to create offshore companies in Russia for trading with cryptocurrency,” Ria Novosti reported. Deputy Finance Minister Alexei Moiseev told journalists that his ministry is “considering the possibility of implementing organized trades of cryptocurrencies on the Russky and Oktyabrsky islands,” according to Tass.

Oktyabrsky is a river island in the European Kaliningrad Oblast. Russky Island is part of the city of Vladivostok, off the Pacific coast near Japan. In November of last year, a Hong Kong company announced that it planned to set up a crypto mining farm on Russky Island.

Referring to a recently published bill entitled “On Digital Financial Assets,” Moiseev said the two islands are being considered in the bill. He elaborated that the opportunity to trade cryptocurrencies on Russky Island was “discussed with the Ministry of the Far East,” Ria Novosti described.

Moiseev believes that “the exchange of cryptocurrency for rubles and other assets can be resolved in separate territories,” Tass noted and quoted him explaining:

Maybe it will not be on the common territory, but within the framework of special territories like Vladivostok Free Port, [where] there is already an offshore element, and now a bill is being prepared for the Russky and Oktyabrsky Islands, where there will be an even more special regime.

Differing Opinions

The Ministry of Finance and the Bank of Russia still have not reached an agreement on the possibility of exchanging cryptocurrency for rubles and other assets.

Russian Presidential Adviser on Internet Development, Herman Klimenko, has “criticized the idea of the Ministry of Finance to create offshore companies in Russia to trade cryptocurrencies,” Tass also reported. According to him, from a technical point of view, there is no difference where the trading of cryptocurrencies is carried out.

Klimenko elaborated, “This is about the same as legalizing mining in a certain territory. You cannot prove that it is conducted on certain sites or on certain equipment.” In addition, he “believes that the organization of offshore companies has no economic basis and will not lead to the creation of new jobs.” He was further quoted by the publication:

"When we do offshore fishing in Vladivostok, it’s understandable, there are fish there. If on the Russian island there were the best quality of Internet access and the fastest connection to the whole world, we would say that, for trading in cryptocurrency, this is the most important factor. Then it would be understandable, and so [as it is] there is no point."

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