Last week, Russian president Vladimir Putin issued a strong deadline for the government to adopt regulations on cryptocurrencies by July 2019. The digital asset industry is seen to have significant relevance, and he would like to make sure Russian State Duma takes the necessary actions to control these industries.
He issued similar orders last year regarding the governance of Bitcoin trading, ICO’s, and crypto mining. In the end, although regulations passed their first reading, they had dropped all the token and crypto terms in favor of the more broad “digital assets”. The main issue with all of this is that Russian legislation lacks the required terminology to properly define cryptocurrencies and the like. For this reason, Putin is updating his demands and looking for more comprehensive regulations on the topic.
Russia’s Current Position
In Putin’s view, Russia has taken a cautious view on cryptocurrencies, and he does not foresee Russia issuing any of their own cryptocurrency. This is because he knows cryptocurrencies transcend physical borders and are not about any single country.
Despite this view, he sees advancements occurring all over the world and wants Russia to be ready for whatever may happen. There are numerous opportunities in the tech space, and just as he wants to control crypto, it would be beneficial if Russia were to harness the potential profits. If there’s anything that billionaire autocrats don’t like, it’s a booming industry they aren’t regulating or profiting from, and that’s what crypto and all its cottage industries represent.
Much of Bitcoin’s promise is to be free of interference from sovereign governments, as well as being censorship resistant. That makes Russia a prime candidate of a country where it would be considered the most useful. Putin is a smart man and knows this, which is why he is moving forward with different methods of controlling the flow of funds.
But as Michael Komin, an expert for the Moscow think tank Center for Strategic Development said:
“The only thing the parliament can do is to ban the technology as such, but it won’t be approved by the Bank of Russia, Department of Finance and Treasury, which are already using elements of blockchain, and by the President Putin’s advisor Andrei Belousov.”
Additionally, recent embargoes on Russian banks have shown how vulnerable they are to outside forces. It is natural that President Putin would want to use cryptocurrencies like Bitcoin or Zcash to anonymously move funds around and retain the wealth of himself and his countrymen.
This is somewhat ironic, because part of the crypto ethos is to be decentralized and avoid the top-down authoritarian states that men like Putin embody.
Crypto Still Hasn’t Hit Mainstream
All of this comes amid recent polls showing that 73% of UK consumers don’t know what cryptocurrency is. Despite the level of dominance it had in the news in late 2017, it is still a relatively unknown and misunderstood technology. The poll further detailed that the most likely “fans” of cryptocurrency were men in between the ages of 20 and 44.
Crypto is generally seen as a way to get rich quick, and people forget it is a highly volatile asset. Even though Russia doesn’t seem to be moving towards regulation for this reason, it is one reason many governments have put forward for the continued regulation of cryptocurrency. Additionally, it makes sense that Putin would want to be well-positioned to regulate cryptocurrency should there come a time where it reaches the mainstream.