Andrey Zubarev, Senior Researcher at the Department for Digital Finance at the Gaidar Institute, commented to Nezavisimaya Gazeta on the government actions related to regulation of the crypto market.
According to the expert, the attempt to establish full-fledged regulation of the cryptocurrency industry in Russia seems logical, albeit belated.
"Over the recent years, a large digital asset market including high public and business involvement has emerged in the country, but it mainly existed beyond the regulatory framework. New initiatives are attempting to close this gap, but they do it rather radically, by transferring logic of the traditional financial market to the crypto industry," noted Andrey Zubarev.
However, he believes that the problem is that this model does not fit well with the nature of crypto assets.
"Unlike securities, which actually require a depository to record ownership, cryptocurrencies are already 'stored' on the blockchain, and this is their distributed ledger. Therefore, regulation worldwide is built around controlling entry and exit points, i.e., that is, exchange for fiat and back. The user is identified on the exchange, and then the movement of funds within the system is logically comparable to the circulation of cash: control takes place upon returning to the legal circuit. However, control goes deeper in the proposed design, up to the point of restricting the withdrawal of funds to personal wallets and their effective "linking" to digital depositories. "This deprives cryptocurrencies of one of their key properties, i.e., independent storage and free movement," Andrey Zubarev noted