Before discussing the very essence of the topic raised and, moreover, discussing the future, let’s dot the «I» beforehand.
What is it – cryptobanks?
By the name, many could assume that a cryptobank is nothing more than an ordinary bank, only for cryptocurrencies. However, if we talk about the majority of those so-called crypto banks, this is not so.
If you’re not in the loop, a cryptocurrency or crypto is a set of binary data that is designed to work as a medium of exchange, in which individual records of coin ownership are stored in a ledger. This ledger is a computerized database that uses strong cryptography to secure the records, transactions, control the issue of additional coins, and verifying the transfer of coins’ ownership.
Or, to put it simply, electronic money, which is handled according to a special algorithm called blockchain. All transfers are recorded and well encrypted, and the users themselves are engaged in maintenance on an equal footing. Oh yes, banks do not participate here at all.
At the moment, there are very few real crypto banks in the world, and there are only a dozen of those who offer their services in a completely legal way. Such as they are quite similar to ordinary banks – they store your crypto, issue cards for paying with this crypto in stores, they can exchange or transfer your funds.
The peculiar thing about them is that:
- they support a very modest number of cryptocurrencies, limited to the most popular ones;
- have a number of restrictions, for example, on withdrawals;
- there is no opportunity to open a deposit, take a loan – “banking” services are not provided;
- you need to verify your identity (like a regular bank, but the idea is that the crypt and the anonymity of transfers);
- work for foreign audiences.
And, of course, all other crypto-banks (apart from legalized ones) are in fact nothing more than exchanges, exchangers and platforms that provide services exclusively for the exchange and purchase / sale of currencies and nothing more.
But what about us? Why don’t we have our own crypto banks?
Laws are the main and, in fact, the only issue of many CIS countries. Already now, in many legislations, the first laws have appeared that regulate the very concept of a “digital asset” (which includes various NFTs, cryptocurrencies). These laws prohibit almost all interaction with crypto, leaving only the possibility of exchanging these assets between individuals. Thus, states seek to delay the advent of cryptocurrency to the masses and protect the monopoly of the state currency.
Simply put, any official transaction involving cryptocurrency is prohibited.
Transfer a couple of bitcoins to a private person? – You’re welcome!
Oh, you’re paying with crypto? – Sir, I’d ask you to proceed with us to the local PD!
This is the reason why we don’t have such banks in the CIS countries.
Not like everyone else
However, not all CIS countries have a strict framework of the law.
For example, in Belarus, the law is much softer and allows you to safely buy, sell and exchange cryptocurrencies on the territory of the state. There are also legal exchanges where, in case of dispute, you can be issued documents on the transactions performed. By the way, within the framework of Decree No. 8 “On the Development of the Digital Economy”, you aren’t even required to pay taxes for this, yet. These prospects attract those who are interested in crypto with their investments to the country. Although even this situation still does not allow creating a full-fledged cryptobank, limited to the above-mentioned exchanges and exchangers.
Dark future or is there still hope?
Here and now
You might think that there is no future. Sadly to say that, but for most of the CIS countries, indeed, in the near future, everything is pretty bad. For the development of the crypto industry, a legal framework is needed. Without a legal framework, there will be no positive dynamics in society. It is simply impossible. The current situation only forces development to stagnate and look for workarounds to expand their activities (including illegal ones!).
As mentioned above, there are those who have taken a step towards the future of cryptocurrencies. There are more and more of them, but for the serious development of the entire sector, it is necessary to accept and support cryptocurrency in most CIS countries. Only after that we can start thinking of developing crypto, and, accordingly, crypto banks.
It’s not over until it’s over
However, there is no reason to despair. Although the CIS community as a whole is in no hurry to accept cryptocurrencies as native ones, it is not going to refuse them either. Thus, within the framework of the “Development of leaders in Russia and the CIS for the future of finance” online conference, dedicated to cryptocurrency and blockchain, various thoughts and expectations regarding crypto in the CIS were expressed. The main conclusions made during the conference:
Alfan Gogus, Regional General Manager of Huobi Global in Russia, Ukraine and Turkey.
“Alfan Gogus highly appreciated the development level of the cryptocurrency market in Russia. He noted that Western partners highly value its potential – this is a very strong market that is rapidly developing and has a solid user base and community. The CIS market has a large number of alternatives in terms of new business opportunities, new operating models. However, regulation is rather weak. He recommended paying more attention to all issues related to licensing activities in the cryptosphere.”
Yuri Vetyukov, President of JCI Invest and founder of the law firm Easy Consulting.
“Yuri focused on the current legislation of the Russian Federation regulating digital assets, as well as draft laws that are under development. According to these drafts, the legal framework is far from ready and there many opportunities to find the right course:
“At the moment, the legislation is still poorly regulated. It already contains the concept of «digital assets» – this is the same as tokens, and «digital currency» – cryptocurrencies directly. There are also specifics in the legislation on how crypto exchangers should act, as well as how legal entities that are engaged in the issue of digital assets should act.”
However, all participants of the online conference emphasized the prospects and potential of the crypto industry in the development of new entrepreneurs and investors in Russia. Accordingly, the crypto banks were are also discussed.