Putin to Blockchain and Cryptocurrencies

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The Russian government has been cautious about cryptocurrencies, said President Vladimir Putin at an annual meeting on Thursday. Asked if Russia will someday have its own cryptocurrency, Putin said he does not see such a result because cryptocurrencies “by definition go beyond national borders.” With such caution, however, he realized that cryptocurrencies “are developing around the world” and that Russia needs to explore the possibilities of technology. Among the possible applications, he said, the blockchain could be used to “avoid various restrictions in global financial trade” — a proposal that facilitates sanctions against Russian banks, companies and individuals introduced in recent years.

Last year, the Russian president issued a series of mandates to Russian officials demanding the regulation of cryptocurrencies, including the domestic mining sector.

Legislative walk
The comments of the Russian president are based on the fact that the country’s legislature is slowly adopting several measures related to the technology — which Putin himself has supported in the past. Three drafts for the blockchain and cryptocurrencies have been introduced in the State Duma until today. Two of them, one called “Digital Financial Assets” and the other “On Digital Rights”, were heard in the first hearing on May 22nd. Both bills aim to introduce basic terminology into the Russian legal language, for example, definitions of tokens and blockchain. They also restrict the redemption of tokens to authorized financial institutions and appoint the Bank of Russia as the regulator.

Another bill “Distributed National Mining” was rejected by the legislature. Michael Komin, a development expert at the Center for Strategic Development, the Moscow think tank, chaired by Alexei Kudrin, former head of finance and one of the proponents of blockchain technology in the Russian establishment, believes that current legislative debates are “half empty” in content because there is still no appropriate legal language for them.

“Parliament can only ban technology as such, but this will not be endorsed by the Bank of Russia or the Ministry of Finance, which already uses elements of blockchain,” Komin said.

He sees that the current bills on blockchain “will remain without progress until more mature times and eventually go under a pile of other papers.”

Marko Vidrih @cryptomarks

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