Crypto News: Russia Eyes $89B in Regulated Crypto Trading Volume

Russia’s crypto demand is gathering pace once again. Crypto news reports suggest that the Bank of Russia will give a green signal for investors to purchase digital assets. They can do this starting September 1 via regulated brokers.

Interestingly, the country’s regulated crypto trading volume is likely to hit $46.4 billion in the first year. One of the country’s largest banks, Sberbank, is mulling over providing loans against crypto collateral for BTC, ETH, and USDT.

Russia Crypto Trading Hogs the Crypto News Limelight

One of the most discussed recent crypto news items is the starting of regulated crypto trading in Russia on September 1st. This is when investors will be able to legally purchase digital assets from regulated brokers.

Sberbank Deputy Chairman Anatoly Popov expects regulated Russian crypto exchanges to see strong activity in their first year. He projects trading volumes of $46.3 billion. The figure could further rise to $87.06 billion by 2029, according to Popov.

Non-qualified investors would be limited to purchasing up to $3,800 worth of crypto annually through a single licensed intermediary. Currently, regulated exchanges are authorized to offer only Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).

“According to Finance Ministry data as of February, the daily volume of cryptocurrency transactions in Russia is around 50 billion rubles, or roughly 18 trillion rubles a year. SberCIB Investment Research analysts have a fairly conservative estimate: in the first year after legalization, around 20% of this volume, or 3.5-4 trillion rubles a year, will be traded on exchanges. This figure could rise to 4.75-5.25 trillion rubles by 2028 and to 7.5 trillion rubles by 2029,” Popov told TASS.

Sberbank to Provide Crypto Loans Against BTC, ETH, USDT Collateral

Russia’s largest lender wants to allow cryptocurrencies to be used as collateral rather than money. Once the new law comes into effect on September 1, Russian companies will be able to pledge Bitcoin to banks. However, they can use the same for everyday purchases.

Sberbank has already prepared for the regulatory changes and handles digital assets. However, its planned expansion remains subject to regulatory conditions.

“We plan to accept not only Bitcoin but also Ethereum and the stablecoin Tether as collateral… after the Central Bank, of course, allows them for public circulation,” said Popov.

President Vladimir Putin signed the law on August 4. Soon after, the Bank of Russia published its first approved list of eligible cryptocurrencies a week later. Only Bitcoin, Ether and USDT made the initial list. Regulators considered factors including market size, daily trading volumes and at least five years of price history on foreign exchanges.

Crypto payments will remain prohibited within Russia. However, exporters and importers will receive an exception allowing crypto payments for certain foreign trade transactions.

Sberbank Aware of US Sanctions Risk

Russian largest lender Sberbank is aware that USDT introduces an additional sanctions risk that Bitcoin and Ethereum do not carry. Sberbank has been under full U.S. blocking sanctions since April 2022 and an EU asset freeze since July 2022.

Tether has previously stated that it can freeze USDT linked to sanctioned entities. This could create additional complications for sanctioned Russian financial institutions handling the stablecoin.

The Bank of Russia also warned in June that stablecoin issuers can unilaterally freeze or seize tokens from legitimate holders under sanctions-related restriction.