Tech culture and the rise of crypto in Russia
Russia is home to one of the most active crypto markets in the world. In fact, back in 2017, President Putin announced plans for a national cryptocurrency, which would be the crypto-equivalent to the Russian Ruble – so far, this has not materialized.
Even more, Russia has a deep-rooted reputation for producing great tech minds. This reputation in tech also stands in the blockchain industry.
Crypto regulation in Russia
Over the years, due to many reported crypto-fraud cases, the Russian central bank has been rather restrictive on crypto activities. However, in 2019, the Russian Parliament announced plans for a legislative framework, that will govern activities in the space.
This framework is expected to address crypto tax controversies, the classification and registration of crypto-related businesses, the classification of crypto assets types and several other concerns.
While legislation is not yet finalized, it seems cryptocurrencies will be categorized into virtual assets (consisting of assets like Bitcoin and Ethereum,) technical tokens (consisting of assets like EOS,) and digital financial assets (consisting of digital securities.)
Now, let’s look at ways and places to buy Bitcoin in Russia.
This is as basic as buying Bitcoin gets. A P2P trade constitutes a direct trade between a buyer and a seller, either via the web or in person. However, traders are responsible for all necessary due diligence to ensure secure trades.
At present, LocalBitcoins, one of the largest and oldest P2P Bitcoin platforms, has about a quarter of its Bitcoin transactions executed in Russia. Also, Paxful is another popular P2P exchange you may want to consider using.
While there are definite benefits to P2P trading, it is also risky. If, for example, you send your crypto to someone online and the other person doesn’t pay you for it, there is very little you can do.
This is by far the easiest way to buy Bitcoin. Payments are made at the machine with cash or with a debit or credit card, after which the funds are sent directly to your Bitcoin address. This method does come at a high cost. Bitcoin ATM service companies like BTC-O-MATIC in Russia, charge as much as 7 to 10 percent on each transaction.
Presently, there are over 51 Bitcoin ATM machines in Russia, with an average monthly turnover of $27,000 from each machine. Despite the previous confiscation of over 20 Bitcoin ATMs’ by a directive from the Russian central bank, Russia still ranks amongst the countries with the most Bitcoin ATM machines.
Buying Bitcoin using an credit or debit card is becoming increasingly commonplace, and some prominent exchanges, such as Binance, now offer this option for Russian users. This method is convenient and safe, especially because they are handled by trusted third partied such as ePay or Simplex. However, the more parties involved, the more expensive.
Over-the-counter (OTC) platforms
Buying Bitcoin via an OTC marketplace is essentially like a P2P trade, except then there is oversight. In this case, the platform operator waits until the seller confirms receipt of payment until the funds are released to the buyer’s account.
With OTC transactions, market prices are defined off an exchange’s public order book, as trading parties set their own prices, which may be slightly more expensive than the global spot price, or cheaper. In this arrangement, prices are less affected by volume, which is a great option if you are going to be buying large volumes.
Buying and Trading Bitcoin on AAX
On AAX we offer an OTC marketplace where you can buy Bitcoin, Ethereum, and USDT with the Hong Kong dollar, Chinese Yuan, or the US Dollar. Also, we are offering a Spot market, where you can trade across over 70 trading pairs; as well as a futures market for users to trade perpetual contracts for Bitcoin, Ethereum, Litecoin, XRP, and EOS, with high leverage.