Russia isn’t the country where legislations are easily passed. There have been numerous attempts to pass a crypto legislation since the beginning of the year, but all of them have ended in failure. The closest point to success was the Russian government’s main bill “On Digital Technologies.” Presumably, Vladimir Putin personally wished for the bill to pass on July 1st, but was inevitable pushed back to an October Duma session.
There were numerous rumors flying around as per the cause of the bill not making the cut in July. Artem Tolkachev stated that “complexity and lack of consensus between state authorities on the issue of regulation” was the key reason for the pushback. In Russia regulation has been a long discussed and very sensitive topic. The problems regarding regulation have gone as far as to cause conflicts between the country’s Central Bank and Ministry of Economic Development.
While the Central Bank has a more conservative stance, the MED is very willing to adapt the new technology. The Ministry of Economic Development states that embracing new and innovative technologies is key for progress and attracting new investors.
Russian Crypto Legislation will answer many questions
According to Tolkachev, who is the Russian Blockchain community chairman for 2 years, expectations are not met. He further explains that the current Russian blockchain and crypto legislation is divided into 3 draft bills, all of which haven’t lived up to the ever rising expectations.
The first “proto-bill” was presented by Russia’s Finance Ministry in the beginning of the year. Framework for regulations, crypto and blockchain technology including smart contracts, all scales of mining and ICOs were featured in details.
The country’s Central Bank naturally opposed the “proto-bill” as reported by TASS. It was also reported that the Central Bank had issues with how transactions were conducted between cryptocurrencies and rubles. The Ministry of Finance were quick to announce that a legislative ban on cryptocurrencies would result in a “perfect environment for illegal use of digital currencies to flourish.”
February saw the Russian President announcing that cryptocurrencies should fall under regulation no later than July 1st.
This was around the same time that the country’s Central Bank went all in against ICOs. The Central Bank wanted to criminalize all ICO investments, while their opponents were keen on the implementation of regulation. Numerous accusations and blame flew from both sides and ultimately, a consensus was never reached.
Today we are not much closer to success. The bill’s most recent version was approved by the State of Duma way back in May. The vote passed on first reading with 99.8% voting for approval. On September it was reported that the bill has an upgraded version and it does not contain a definition for “cryptocurrency.” Mining was also defined as “releasing tokens to attract investment in capital.” Those questionable changes effectively made an illegitimate means of payment.
Exchanges often fall under question. While they aren’t affected by the crypto legislation, they are a sort of a neutral zone. Russian citizens are free to trade cryptocurrencies via peer-to-peer (p2p) transactions. The beginning of last month saw Dimitry Peskov, special representative of the President saying that the country is still not ready for issuance and circulations of cryptocurrencies. He also noted that cryptocurrencies are “contradicting the basic functions of the government.” Peskov believes that a sandbox type regulation will be required in order to analyze and develop the aspects of this unique industry.
Even though the President’s deadline passed already, he still hasn’t given clear statements about crypto in Russia. In his recent Q&A with the Russian nation, he expressed very negative statements about cryptocurrencies and their uses. He stated that cryptocurrencies will probably work great in Japan, but not at all in the rest of the world.
Even though cryptocurrencies usage in order to avoid sanctions is becoming increasingly popular, Tolkachev doesn’t believe that Russia will resort to these measures. He also stated that the famous “crypto ruble” is just that, a rumour.