Orders From the top
Over the last couple of months, Russia’s plans for cryptocurrencies have been anything but clear.
In August, the nation struck a deal with blockchain platform Ethereum to create Ethereum Russia, and in September, finance minister Anton Siluanov said Russia was planning to legalize digital currencies. Earlier this month, however, the country decided to block cryptocurrency exchanges, a move that was made even more baffling when President Vladimir Putin later said banks needed to support them. A few days after that, Putin announced that Russia would be issuing its own cryptocurrency.
The latest development in the Russian cryptocurrency space happened over the weekend when Putin released five presidential orders designed to guide the nation’s future relationship with cryptocurrencies and blockchain technology.
The Future of Blockchain
According to Motherboard’s Google translation of the orders, the first tasks Russia’s government and the Bank of Russia with determining how cryptocurrencies, tokens, smart contracts, and other blockchain-related concepts fit into the country’s financial framework. The two organizations must also establish guidelines for cryptocurrency mining and create a mining registry in order to tax miners.
The third order tasks Russian Prime Minister Dmitry Medvedev and Central Bank of Russia leader Elvira Nabiullina with regulating token sales during initial coin offerings (ICOs) to bring the process more inline with initial public offerings (IPOs). The goal is to prevent blockchain companies and startups from raising funds in a way that subverts the usual capital-raising process banks and private companies must go through. This, along with the two previously detailed orders, must be completed by July 2018.
Putin also wants a special regulatory platform created. Referred to as a “sandbox,” this would allow blockchain companies to pitch new applications to the Bank of Russia, thereby enabling the bank to enforce proper regulations before the idea is incorporated. This order is to be completed by December 20.
The final order calls for the formation of a “single payment space.” This would be for “the member states of the Eurasian Economic Union with the use of new financial technologies, including the technology of distributed registries.” Motherboard notes this may be in preparation for Russia’s CryptoRuble and Kazakhstan’s forthcoming cryptocurrency. The deadline for this part of Russia’s plans for cryptocurrencies is March 2018.
Following the slightly muddled message expressed over the past couple of months, these new presidential orders are a clear sign that Russia intends to embrace cryptocurrencies, while others nations, such as China and South Korea, move in the opposite direction.
Digital currencies and tokens are expected to influence the creation of a new digital economy, but predicting the future of crypto in Russia once these new regulations are in place is impossible. The world will just have to wait to see if Russia’s plans for cryptocurrencies make the nation a world leader in the blockchain space.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.