Alex Carchidi, The Motley Fool
5 min read
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Bitcoin has made a couple of new all-time highs recently.
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Obviously, it had to do that many times in the past to get to where it is now.
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There's a new reason to expect its growth to continue over time.
Bitcoin's (CRYPTO: BTC) new all-time high of about $109,800 will eventually look like a small hill in comparison to the heights it will likely reach, just the way the once-unthinkable $1,000 price level it surpassed in February 2017 looks today. As if there weren't enough reasons to be bullish about the coin's future, there's now yet another reason pertaining to its regulatory status in one of the world's major countries.
Here's what just happened and why it matters.
On May 15, the Ministry of Finance and the Central Bank of Russia announced that they would launch a pilot of a new cryptocurrency exchange wherein digital assets would be legalized and transactions would be above-board as part of an experimental legal regime designed to test regulation of the industry. The exchange, and legal access to buying, holding, and trading cryptocurrencies, will only be accessible for certain qualified investors and the companies that they are associated with, at least at first. The move comes on the heels of a proposal from the central bank in mid-March that planned for the introduction of the experimental legal regime so as to create a safe environment for developing sensible regulations that would enhance the cryptocurrency industry's viability in the country.
Furthermore, the government will launch another pilot, which seeks to test the use of cryptocurrencies in settling trade payments. This builds on a more informal scheme that was in operation since at least late last year, in which the country's companies have been using Bitcoin to pay for commodities like oil to dodge international sanctions. It's also somewhat in conflict with Russia's policies regarding citizens using crypto for payments to each other, which is still banned, at least for now.
So how is all of this bullish for Bitcoin?
In short, it suggests that Russia's disposition toward cryptocurrency, and specifically Bitcoin, is changing rapidly. It's already getting utility from using the coin to evade sanctions, and now it's creating testing grounds that could lead to it opening the doors to investments from its capital base relatively soon.
And that will increase demand for Bitcoin, in addition to paving the way for further investment in the country's Bitcoin mining capacity. Russia is already responsible for about 4.6% of the world's mining output.
