Cryptocurrency traders, enthusiasts, and even global political superpowers are closely watching the Russian government’s progress with cryptocurrency regulation. Leading Russian banks and institutions have already voiced their willingness to work with, and ‘legalise’ cryptocurrencies, due to the unprecedented increase in demand from Russian investors. However, the government has recently opted to remove all mention of the word ‘cryptocurrency’ from its legislative terminology and legal documentation. Steps to progress with the regulatory framework necessary to legitimize cryptocurrencies are, on the surface, on hold. Whilst this may initially seem negative, it becomes apparent why this is necessary upon closer inspection.
Current Russian Cryptocurrency Legislation
Cryptocurrency legislation was originally slated to be ratified into law during July when three bills were submitted to the State Durma, Russia’s lower house of parliament, ordered by President Putin. Government officials attempted to combine the draft bills into a unified piece of legislation, but were unsuccessful.
Russian lawmakers have therefore revised the original framework, which now focuses on ‘digital financial assets’. This will be officially unveiled for public discussion later this quarter, with the aim of pushing ahead with regulatory adoption by the end of 2018. If regulation remains on track, it would mark a great moment of validation not just for Russian cryptocurrency traders and investors, but also potentially create a positive shift in global sentiment.
By redefining the term ‘cryptocurrency’ to ‘digital financial assets’ Russian lawmakers hope to avoid the confusion currently surrounding national and international efforts to classify the class of the new financial technology ecosystem. The new draft appears to describe cryptocurrencies as ‘the issuance of digital tokens’ designed to ‘attract capital investments’. If this new definition remains intact, it would fall under the existing view of Initial Coin Offerings (ICOs) issuance.
Conclusion – The Future
Interestingly, government officials have been under increasing lobbying pressure from major business conglomerates and enterprises, to provide a clear regulatory framework. Russia’s largest business enterprises, the Russian Union of Industrialists and Entrepreneurs, has even gone so far as to publish an what is being called an ‘alternative bill’ which grants a ‘special status’ to cryptocurrency. As is the case with other developing jurisdictions, cryptocurrency traders and hodlers alike will continue to go about their daily digital business, not waiting for lobbyists and lawmakers eventually make up their minds.