Blockchain Regulation in Russia

August 8, 2018

There is a growing number of new and emerging technologies whose ascertainment is required in many fields such as education, society, medicine, science, and more importantly, the Regulation from the government. The recent appearance and development of blockchain has proved to everyone that it is the next big thing after the invention of the Internet. In such light, blockchain regulations have become an essential prerequisite for many countries wishing to be at the forefront of the industry.

In response, nations have to adjust their blockchain regulations to be able to adapt to this ever-changing landscape. Being one of the countries with high potential of blockchain technology as well as one of the most vibrant economies in the world, Russia has recently announced its own regulations regarding this groundbreaking technology.

Government needs blockchain foundation focused on stability

Vice-Minister Alexei Kozyrev announced at the beginning of the “Kritposredsa” forum that the deployment of blockchain-based system would help resolve storage, document protection and long-standing forms of identity. The Russian government announced Blockchain regulation and carried out Blockchain initiatives late last year.

In early December, the government began pilot testing of the use of Blockchain to improve local electoral systems and enhance transparency in the “Active Citizen” initiative. On December 19, 2017, the state-owned, Sberbank Bank announced a partnership with Russia’s Federal Antitrust Service (FAS) to deliver and archive documents through Blockchain. (1)

The Russian blockchain regulation allows Cryptocurrency and the use of ATM Bitcoin

The Russian government has officially announced a draft of a federal law entitled “On digital financial assets” that regulates pre-coding in Russia. The draft law provides for the first time a formal definition of Russian pre-coding including the definition of pre-coding, tokens, smart contracts, pre-coding and mining. This document makes it clear that Russians have the right to transact their coding with other digital assets and traditional currencies.

The document also puts restrictions on wallets. A wallet is defined as “a software and hardware tool that allows you to store information about digital records and provide access.” Most of the material refers to ICOs. It specifies the rules for selling tokens such as the release procedure and the documents and information that must be disclosed prior to sale. For each ICO, the issuer must also provide an investment copy containing all issuer-related information and tokens. (2)

The number of Bitcoin ATMs is increasing in Russia. Recently, ten ATMs have been installed in five districts of Novosibirsk. Last week, another company announced plans to install hundreds of digital money ATMs at hotels and terminals at the Moscow airport starting this month. ATMs can be programmed to sell four types of digital money, Panova explained, adding that they could also sell Token Initial Coin Offering (ICO). Initially, the commission would be 4%, he told Innov. (3)

Russia is the first country in Blockchain technology?

Russia has been showing serious interest in Blockchain technology. In June, Putin had a meeting with Vitalik Buterin, the founder of the Ethereum-coded currency. In August, VEB also signed an agreement with the Ethereum Foundation to develop the Blockchain education program in the country. Government-level implementation is now conducted. Russia is one of the largest countries in the world to be very active with Blockchain and virtual currency technology.

Two months ago, the Cabinet of Government of Russia has made the public surprised by the intention to create their own virtual currency. At the same time, the Russian Minister of Communications quoted President Vladimir Putin as saying that Russia would officially issue a coin called Cryptoruble. (4)

However, like many other governments, the official view of the Russian government on allowing its people to use electronic identifiers on a regular basis is still relatively strict. The government has not changed its stance that monetary policy in the economy will still need to be tightly controlled.

Experts say that it is not too late for Russia to be the leading country in Blockchain technology, sometimes overwhelmingly the United States. This country is where the first coding lines of Ethereum came into being and also where many of the ICO projects started.

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