In an intriguing move, Russia is actively exploring the legalization and regulation of Decentralized Autonomous Organizations (DAOs) within its evolving legal framework. The aim is to promote liquidity and growth in the local Digital Financial Assets (DFA) market.
Russia draws attention with its approach to the crypto field
Ivan Chebeskov, Director of the Financial Policy Department of the Russian Ministry of Finance, makes a statement on the issue. He provides information about this initiative during Crypto Summit 2023. It acts against the background of international sanctions affecting Russia. Accordingly, the country is focusing on adopting a decentralized financial paradigm through DAOs.
DAOs or Decentralized Autonomous Organizations are at the heart of decentralized finance (DeFi). These organizations act to manage various financial activities autonomously. Accordingly, it uses blockchain technology and smart contracts. On the other hand, it works effectively without central control. The scope of DeFi DAOs includes lending, asset exchanges, storage, staking, and more.
evading sanctions
Russia sees this move as a tool to stimulate its financial markets and increase liquidity, especially in the face of existing sanctions. Ivan Chebeskov emphasizes the importance of bridging the gap between DFAs and decentralized finance:
“We actively advocate for the development of DFAs. But we know that CFAs alone will not ‘take off’. “To leverage the liquidity available in decentralized finance (DeFi), we need a connection between DFAs and the world of decentralized finance.”
Russia and DFA journey
Russia has been taking important steps since the DFA bill became law in 2020 under the leadership of Russian President Vladimir Putin. Accordingly, it strives to attract investors to the digital financial assets sector. As of now, only ten platforms are registered through the Central Bank of Russia. This also indicates a slow start.
The potential legalization of DeFi DAOs is seen as a catalyst that could accelerate the growth of the DFA market in the country. According to Chebeskov, DAO needs to be legalized so that both DFAs and decentralized finance in general can develop more actively.
Unique Russian approach
Notably, unlike some countries that require new definitions and regulations to accommodate DAOs, the situation is different in the country. Russia believes its current legal framework can accommodate these assets without significant changes. Chebeskov states that DAOs will develop after legalization. He also expresses optimism that it will contribute to the country’s improving financial environment.
There are international sanctions imposed on Russia due to geopolitical tensions. Accordingly, the country and its investors have shown flexibility and innovation to avoid these restrictions. Cryptocurrency has emerged as a potential tool for local investors to evade sanctions. On the other hand, there are also rumors that Russia is considering legalizing crypto for international trade. All of this surfaced when we looked at it as cryptokoin.com, reflecting the country’s ability to adapt in these difficult times.
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