Vladimir Putin, the President of the Russian Federation, wants to put an end to the ambiguity surrounding the cryptocurrency community in Russia and has issued a deadline for the confirmation of the regulatory guidelines that will govern virtual currencies.
Kremlin.ru, the official website for the President, issued a document which instructed the Federal Assembly, the national legislature of the Russian Federation that cryptocurrency regulations should be issued latest by July 1, 2019.
According to Putin’s instructions, Russia’s upper house, the Federation Council and the State Duma, the lower house of the Federal Assembly have to adopt a set of regulations governing digital assets in the next few months.
The main aim of the regulations, according to the document released, is to creating a developing regulatory environment so that the country’s digital economy can improve. The regulations are not meant to govern an isolated part of the industry, but rather to push the entire economy upwards.
Furthermore, these regulations will include civil-law digital settlements, and in addition to cryptocurrencies, the guidelines will also encompass digital financial assets.
During the beginning of 2018, when the cryptocurrency markets were still enjoying the “Crypto-boom,” and the global crypto valuation was upwards of $800 billion, Vladimir Putin stated that the Russian government should introduce legislation that will allow people to trade not only Bitcoins but other virtual currencies.
Additionally, the above order also included the regulatory requirements for other crypto-specific aspects like initial coin offerings [ICOs] and mining of cryptocurrencies.
However, there is a lack of enthusiasm within the Russian polity to further these cryptocurrency regulations. Following Putin’s orders, the regulations were tabled in front of the legislature, but cryptocurrencies were amended by them to reflect, “digital rights.” An updated copy of the bill further removed mining of cryptocurrencies from the bill.
In December of last year, the Blockchain Lawyers and Russian Association of Lawyers created a commission of legal experts that will look into crypto-specific cases and address any pertinent legal challenged due to the ambiguity of the cryptocurrency regulations then.
Earlier this month, Alexander Konovalov, the Minister of Justice of Russia, claimed that the industry is still at its early stages and to create a statutory list of regulations for cryptocurrencies is pre-mature, as digital assets are not a payment medium in the country. He added that these digital currencies should be defined in another set of “assets,” and hence the legislature should delay their confirmation.
The head of VTB, Russia’s second largest bank, Andrey Kostin, likened cryptocurrency mining to the act of counterfeiting. He stated that someone who mines cryptocurrencies equates someone who prints their own money. Kostin believes that the virtual currency world cannot possibly be regulated like the customary stock market. He added that if this type of asset class becomes mainstream, it could be dangerous for the overarching financial market.
Russia will see the first development to this bill next month, when the State Doman reviews the regulations, following which, the guidelines will be sent to the other branches of the legislature for approval.
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Graduate of Finance and Economics, interested in the intersection of the world of decentralized currency and global governance.