Russia is set to legalize decentralized financial organizations, ushering in a new era of financial freedom. This move will allow individuals and businesses to operate in a decentralized manner, reducing reliance on centralized authorities. With the upcoming legalization, Russia is ready to embrace the power of blockchain technology and revolutionize the financial sector. Stay updated on the latest developments in decentralized finance and its impact on Russia’s economy.
The Legalization of DeFi DAOs in Russia
Russia is taking steps towards legalizing and regulating decentralized financial organizations, commonly known as DAOs. The aim is to bring more liquidity to the local Digital Financial Assets (DFA) market. Ivan Chebeskov, the Director of the Department of Financial Policy of the Ministry of Finance, shared this development at the Crypto Summit 2023.
Russia’s Approach to DeFi DAOs
In light of internationally imposed sanctions on Russia, the country is shifting its focus towards legalizing a new form of decentralized finance called DAO. This move aims to inject excitement into the markets while embracing the principles of decentralization.
A DeFi DAO refers to a Decentralized Autonomous Organization that utilizes blockchain technology and smart contracts to facilitate various financial transactions in a highly decentralized manner. The introduction of DeFi DAOs is expected to revitalize the Russian markets, enabling activities such as lending, exchanging, storing digital assets, and staking.
This decision by the Russian government is seen as a strategy to increase market liquidity amidst recent sanctions. During the summit, Chebeskov stated:
“We actively advocate for the development of DFAs, yet we understand that DFAs alone will not ‘take off’; we need a connection between DFAs and the decentralized world of finance to utilize the existing liquidity in decentralized finance.”
Since the DFAs bill was signed into law by President Vladimir Putin in 2020, Russia has been facing challenges in attracting investors. According to Chebeskov, only 10 platforms have been registered through the Bank of Russia so far.
Despite this, there is hope for the DFA market to gain momentum, and the potential legalization of DeFi DAOs could expedite the process. Chebeskov emphasized that Russia recognizes the need to legalize DAOs in order for both DFAs and decentralized finance to flourish.
Interestingly, Russia does not require new definitions for DAOs before legalization, unlike other countries. Chebeskov is optimistic that the DAOs will perform well once legalized.
Russia’s Creative Approach in Evading Sanctions
Since the commencement of Russia’s controversial invasion of Ukraine, the country has faced sanctions from major economies, primarily led by the US. In response, Russia and its investors have been resourceful in finding ways to evade these sanctions.
Reports from last year indicated that local investors could use cryptocurrencies as a means to bypass sanctions. Furthermore, in 2022, rumors spread about Russia considering the legalization of cryptocurrencies specifically for international trade.