Russia’s “unsurprising” move to regulate cryptocurrencies is expected to encourage other countries to follow suit, according to industry participants.

following a framework produced by The government and central bank of RussiaLegislators are expected to draft new laws or amend existing laws to oversee cryptocurrencies as currency. The measures, according to Russia, will stabilize any broader economic impact of digital assets.

Anto Paroian, chief operating officer of digital asset investment fund ARK36, said Russia’s response to the cryptocurrency boom reflects a broader shift in nations that recognize the technology is here to stay.

In general, the authorities [are starting to] recognize that cryptocurrencies are becoming such an ingrained part of how people think about and manage money in the digital age that the political and economic cost of banning them appears to far outweigh the risk of allowing them to co-exist with legacy financial systems Paroian told Blockworks via email.

Time is of the essence before international bodies start influencing policy, according to Nick du Cros, head of compliance and regulatory affairs at CoinShares.

“These proposals are likely to send the message that countries need to enact local regulations quickly and not wait for [Group of Seven] to set international standards,” du Cros said, referring to the political forum made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

Anthony Pompliano, founder of Pomp Investments, wrote in a Wednesday newsletter that Russia paying “sympathetic” attention to cryptocurrencies, including including digital assets on its balance sheet, would “force the hand of the United States.”

“There is an ongoing global competition that has an open and decentralized system at the core; anyone can connect to the system,” Pompliano wrote. “The theory of the game is that no one wants to start the cascade, but once your opponent does, you are forced to adopt the technology or risk being left behind.”

The US, in any case, will be closely watching developments in Russia, which is due to draft legislation by February 18, including standards for taxing cryptocurrencies.

The measures come after the Russian central bank last month. proposed restrict the circulation and exchange of cryptocurrencies, ban investments in cryptocurrencies by financial institutions, and ban cryptocurrency mining.

Russian President Vladimir Putin has since said he supports a plan to tax and regulate mining, referring to the “competitive advantages” Russia could gain from crypto mining.

Members of the United States Congress, meanwhile, have held hearings in crypto in recent months, and industry observers wait for more regulatory clarity this year. TO bipartisan bill introduced last week Proposed tax breaks for crypto transactions of $200 or less.

The United States and Russia have strong economic incentives to implement a plan, considering the latter accounts for around 11% of the world’s bitcoin mining, and the former controls 35%, according to the University of Cambridge. Bitcoin Electricity Consumption Index. Both countries increased their hash rate following China’s mining ban.

Whit Gibbs, CEO of Compass Mining, which operates two mining facilities in Siberia, Russia, called the country’s approach “do no harm,” adding that Russia has made solid progress in attracting international investors to establish mining operations there. .

“I think most nations are already considering taking similar steps to recognize bitcoin and cryptocurrencies as currency,” Gibbs said. “Hopefully this positive result will influence other nations to take the same official stance.”

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