Russia, along with China and India have restrained trading in cryptocurrency but all the three nations are witnessing a surge in demand for over-the-counter (OTC) investment in Bitcoin and other cryptocurrency assets. EurAsian Times analyses a report on Cryptocurrency Trading in Russia, China and India.
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According to reports, the daily trading volume of major cryptocurrencies like Bitcoin and Ethereum in Moscow alone reach $50 million on peak days, which is comparatively meagre in comparison to major cryptocurrency exchanges but largely given the regulatory uncertainty in Russia.
Presently, investing in cryptocurrencies is not illegal based in Russia. Because cryptocurrencies are considered as properties, as long as the capital being invested in the cryptocurrency market comes from a genuine source, it is technically legal to hold cryptocurrencies in Russia.
Regulatory Uncertainty in Russia
Still, Russia has witnessed stagnation in the growth of its crypto market due to the lack of regulatory structures and policies. While it is legal to invest in the market, it remains uncertain whether corporations are permitted to operate crypto trading platforms.
Earlier, the Russian government drafted three legislations around cryptocurrencies and crypto-related businesses, addressing the legitimacy of exchange operators and cryptocurrency trading. But, the approval of the three bills was postponed to the end of 2018 and until the government definitely approves businesses to operate as cryptocurrency exchanges, the market will not see the emergence of regulated cryptocurrency exchanges.
Local OTC platforms that rely on global crypto exchanges to pool in liquidity into the cryptocurrency market of Russia charge 1.5 to 2% as commission rates and are able to generate hundreds of thousands of dollars in daily profit, despite having about 20 active daily investors.
Traders in China and Russia are deceiving local restraints by trading OTC. China, unlike Russia, has strictly forbidden the trading of cryptocurrencies. Hence, it is not legal to purchase or hold cryptocurrencies.
But, according to the SCMP Report, activity in the cryptocurrency exchange market of China has remained active, despite various attempts by the government. Financial authorities of China have made it difficult for investors in the country to allocate their holdings in yuan to digital assets. Through shell company bank accounts in Hong Kong, investors have still been able to invest in cryptocurrencies, in massive amounts.
Even in countries like China, it has been a massive task for the governments to completely outlaw Bitcoin and other cryptocurrencies due to the presence of offshore markets. Experts foresee that the activity of cryptocurrency investors in regions like India, China, and Russia to improve in the years to come, regardless of policies in the three countries.