Meanwhile, the regulatory framework for cryptocurrencies is still missing in the country, despite the fact that local authorities have been tasked to prepare the needed amendment a while ago. So, where is Russia heading in terms of crypto and blockchain?
Brief introduction to Russia’s relationship with cryptocurrencies
Russia’s stance on cryptocurrencies has been mixed and fluid, as demonstrated by how the “CryptoRuble” — the national stablecoin project — has been unfolding. First, the prospect of using a substitute for conventional money was deemed “illegal” by financial ombudsman Pavel Medvedev. Then, the Kremlin supposedly decided that a pet stablecoin could “minimize the amount of anonymous transactions,” or even help evade Western sanctions, thereby greenlighting the project. However, the CryptoRuble ended up on the back burner in the end, as the current status of the project is unclear. It was last mentioned in the news in January 2019, when a government official declared that it could go live “in a 2-3 years,” although the Central Bank of Russia (CBR) was acting “very conservatively” about the idea.
Cryptocurrencies at large are in a similar situation. In October 2017, President Vladimir Putin claimed that cryptocurrencies “cause serious risk” and are used for crime, citing the CBR’s decision to block websites selling digital assets. Just a month prior to that, Russian Finance Minister Anton Siluanov argued that the authorities had to accept the idea of the digital currencies market:
“There is no sense in banning them, there is a need to regulate them.”
There have been numerous attempts to define cryptocurrencies legally since then. At different times, Russian lawmakers have been urged to introduce a regulatory framework by President Putin (twice), the local Supreme Arbitration Court and the Financial Action Task Force.
In May 2018, the crypto bill — titled “On Digital Financial Assets” (DFA) — was passed by the Russian parliament but was soon sent back to the first reading stage due to the lack of definitions for key concepts, such as crypto mining, cryptocurrencies and tokens.
Last month, Prime Minister Dmitry Medvedev reportedly said that the popularity of cryptocurrencies “has decreased,” which is why the regulation issue “not that relevant” anymore. Notably, a year ago, he urged the government to legislate at least some basic crypto terms.
The current deadline for the regulatory framework set by Putin expires in July.