Thursday , 19 April 2018

Cryptocurrencies will not be legalized in Russia

Russia’s regulatory position regarding cryptocurrencies has changed significantly in recent years, with the country frequently oscillating between prohibitive and permissive leanings. In recent months, the Russian state has increasingly spoken in favor of bitcoin mining, expressing its desire to overtake China’s dominance in the global mining industry. Regarding trading, the deputy finance minister has recently reaffirmed that “people can be allowed to buy and sell on licensed sites if they are qualified investors.”

Speaking to reporters in Moscow on Monday, Russian minister Nikolai Nikiforov has opined that the country will never allow cryptocurrencies like Bitcoin to be legalized after deeming it a “foreign project.”

According to TASS, the country’s largest news agency wholly owned by the Russian state, Nikiforov stated:

“Bitcoin is a foreign project for using blockchain technology, the Russian law will never consider bitcoin as a legal entity in the jurisdiction of the Russian Federation.”

The Russian official went on to add that the government was open to digital cryptographic tokens through ICOs and bitcoin’s underlying technology, the blockchain. “However, I think that it is quite possible to use blockchain technology and the use of various digital tokens,” he added.

In late 2015, Nikiforov publicly spoke toward the “necessity to explore the use of blockchain technology in the best interests of the public.” The Russian official claimed the innovation can help both the national economy and “relations between the state and the public.”

Nikiforov’s aversion to the world’s first and most prominent cryptocurrency hasn’t stopped the official from revealing the state’s intent to issue its own cryptocurrency, dubbed the ‘cryptoruble’. The state-issued cryptocurrency will be developed and issued “quickly”, Nikiforov said, following a meeting between Moscow’s elite and Russian president Vladimir Putin last month.

While Russian authorities have long adopted a hostile stance toward decentralized cryptocurrencies like bitcoin, ICOs and blockchain technology have seen far less scrutiny. In late October, Putin ordered ministries to develop a regulatory framework for initial coin offerings (ICOs) and cryptocurrency mining operations in the country. Last week, a senior Russian central bank official threw his support for ICOs, underlining their “huge potential” for financing startups in the country.

Although, it seems that Russia will adopt a permissive regulatory framework for bitcoin and cryptocurrency mining. At the start of the month, Bank of Russia’s first deputy chairman, Olga Skorobogatova, stated: “cryptocurrency mining is a kind of activity of legal entities and private entrepreneurs [which] should be taxed.”

Contradicting reports from last month, Russian media outlet Tass recently revealed that “the Ministry of Finance does not intend to introduce licensing for the mining of cryptocurrency but the mining will be taxed.” It has also recently been revealed that numerous Chinese and European companies have applied to The Russian Association of Blockchain and Cryptocurrency, seeking to establish mining operations in The Russian Federation.

Leave a Reply

Your email address will not be published. Required fields are marked *