More than 56 percent of Russians have already heard of Bitcoin, according to a survey conducted by “All-Russian Center for the Study of Public Opinion, or VCIOM,” translated by Bitcoin.com

The popularity of Bitcoin and cryptocurrency as an emerging asset class amongst the youths in Russia has increased exponentially over the past few months. The survey revealed that 75 percent of individuals between ages 18 to 24 have learned about Bitcoin, and 74 percent of Russia’s capital Moscow’s population is now aware of the cryptocurrency.

However, only a minority of the individuals that have already heard about Bitcoin understand that Russian citizens and residents can invest in the cryptocurrency market. Over 16 percent of the individuals with underlying knowledge in Bitcoin still believe investing in Bitcoin is illegal in Russia.

State of cryptocurrency market in Russia

For many months, the Russian authorities have teased the regulation of its local cryptocurrency exchange market. In early October of last year, Russian authorities agreed to legalize cryptocurrencies and regulate the country’s cryptocurrency market by licensing exchanges.

Finance Minister Anton Siluanov was quoted by local media outlet TASS news agency as saying:

“The President has spoken of the problems related to cryptocurrencies. These are difficulties regarding ... money laundering and cases that are related to identification issues. That’s why we have agreed that the state should regulate the issuing of cryptocurrencies, their mining and turnover. The state should take all this under control.”

At the time, Siluanov and the rest of the Russian government came to a consensus to implement strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies to prevent money laundering and cryptocurrency businesses from running fraudulent operations.

In October, the Russian Finance Ministry stated publicly that it plans to regulate the Russian cryptocurrency market by the end of 2017. In December of the same year, Anatoly Aksakov, the chairman of State Duma's financial markets committee, noted that a cryptocurrency bill has been introduced and it will likely be adopted in March 2018.

"The problem is that we already have a lot of people who acquire [cryptocurrencies] and they are deceived, we need to give people the opportunity to work legally with it, to protect them as much as possible," said Aksakov.

The Russian president Vladimir Putin has ordered the government to set up regulations for the trade of Bitcoin and other cryptocurrencies, ICOs and mining by July 2018

Earlier this month, the Russian President said in an interview with TASS: “This is the prerogative of the Central Bank at present and the central bank has sufficient authority so far. However, in broad terms, legislative regulation will be definitely required in future.”

Moreover, in late 2017, Putin also requested the Russian government to regulate its cryptocurrency mining industry properly, as an increasing number of mining centers have reallocated to Russia to utilize its cheap resources and electricity.

Several Russian provinces and cities have also been encouraging cryptocurrency miners to relocate their businesses from other leading regions like China to Russia, as the global cryptocurrency mining industry evolved into a multi-billion dollar market.

Can Russia evolve into major cryptocurrency market?

As shown in the survey mentioned above, more than a quarter of Russians that are already aware of Bitcoin and the cryptocurrency market still believe that cryptocurrency investment in Russia is illegal, and lack of regulations within the local market is restricting the adoption of Bitcoin.

Proper regulation of the Russian cryptocurrency market would likely lead to a surge in interest, demand, and volume, allowing Russia to compete against Japan, the US, and South Korea as a major cryptocurrency market.