Russia may Toughen its Political Views on Cryptocurrency Regulation

The question of digital market regulation still remains untouched in the Russian Federation. Even though deputies are already discussing the matter and taking it seriously, there is a high probability of the fintech being banned, as top officials think Russia is not ready for issuance and circulation of crypto.

"The issuance and circulation of cryptocurrencies cannot yet be permitted. It contradicts the basic functions of government. Order is important. If we adopt a bill on the principles of working with cryptocurrencies on the government level, then we can discuss the implementation of those principles in daily life. But it’s not right to do this in reverse," Dmitry Peskov, Vladimir Putin’s Special Representative on Digital and Technological Development told RIA.

Crypto-assets, ICOs, virtual coins, and tokens in Russia are guided by no legislative power yet. Mr Peskov has expressed a quite negative attitude towards cryptocurrencies, stating there is no point in the legalization of crypto in the country at this stage. He recalls the events of the 1990s and compares crypto to MMM, the biggest financial pyramid that ever happened in Russia.

What is the Plan?

Peskov believes that the most reasonable approach is to create regulatory sandboxes that would allow studying and analyzing the work of the crypto sector. The launch of such a  sandbox is in line with the key fintech priorities, which the Central Bank set for the years 2018-2020.

George Goognin, Global Ambassador at the Mile Unity Foundation aimed to educate the community about new technologies and tools for the global retail, b2b and intergovernmental (g2g) payments, and Vice-Chairman of Expert Council on digital economy and blockchain technology at the Russian State Duma agrees cryptocurrency needs regulations. He told Coinidol:

“Russia is not the first and not even the second in the crypto legislation pace. Japan, Switzerland, USA, Israel, Germany and many other countries have already took the first places. I agree that many ICOs have scammed the investors, and security tokens issuance must be strictly regulated, just like regular fiat IPO. But virtual currencies, obviously, is one of the best tools for Russia to stay on track in global trading and investments no matter the sanctions.”

Earlier this year, Vladimir Putin himself turned to the digital currency subject during his annual live question and answer session. The President said that Russia can’t have its own cryptocurrency, since even "by definition" it can’t be controlled by a centralized organization. He also noted that, although the government does not regulate crypto mining, it takes the fintech very cautiously.