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All Eyes on Russian Blockchain Policy

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Ministry of finance to legalize cryptocurrency trading

At OPEN, we’re all about mass adoption of cryptocurrencies and blockchain tech, and to that end keep an eye on the world stage for clues that it’s gaining traction. Right now, Russia seems to be in the spotlight on that stage, as yet another world power that could very well be legalizing cryptocurrencies.

After months of speculation and conjecture, a bill drafted by the Russian Ministry of Finance to legalize the trading of cryptocurrencies could be a first step in the legitimization of digital assets in the country. While Russia has no explicit laws on digital money, it is currently not legal to pay for anything with cryptocurrencies or convert them into rubles, and mining for cryptocurrency is a grey area at best.

The bill, which is expected to be adopted as early as March, would address these issues, creating a more open environment for cryptocurrency trading and token investment in Russia, though only on approved exchanges, and would introduce regulations around mining.

“This is about the fact that buying and selling [cryptocurrencies] will be somehow standardized…it will be necessary to buy and sell on official exchanges, as it will be declared, it will be legalized”, said Deputy Finance Minister Alexei Moiseev.

Embracing Change, but Taking it Seriously

President Vladimir Putin seems to see an inevitable future with cryptocurrency — after meeting with Ethereum founder Vitalik Biturin in June, it was noted by the Kremlin that “The President supported the idea of establishing ties with possible Russian partners.” There’s even talk in Russian economic circles of a potential CryptoRuble (though far from unified). Still, recognizing associated risks, President Putin mandated that legislation be in place for bitcoin and other cryptocurrencies, ICOs, and mining, no later than July 2018.

No doubt, this new bill is in response to that call for that government oversight, and it comes at an important time for Russia, as support for blockchain tech and cryptocurrencies is booming. Support from the likes of Dmitry Marinichev, for example, who runs the Russian Mining Center, a 9,000 square meter warehouse in Moscow, and raised $43m in an initial coin offering to scale the project; and Aleksey Kolesnik, who reportedly acquired two power stations in the Perm Region solely for the purpose of running a data and mining center.

Currently, only about 3{e9b7b6e97581a958d2bc378a46799d644da7fe427050b58be8de8c4fdd2a2020} of bitcoin nodes are located in Russia, but the cold weather and cheap access to energy could change that if mining is legitimized. Additionally, blockchain-based Russian companies like Waves, with a claimed market cap of $400m and 80{e9b7b6e97581a958d2bc378a46799d644da7fe427050b58be8de8c4fdd2a2020} of its business conducted outside of Russia, could bring their tech and associated income home.

OPEN and Beyond

Exactly what we can expect from this legislation as yet remains to be determined (we should know more in February). But for the world of cryptocurrency the message is loud and clear: this means business. When governments on the world stage are forced to create legislation for emerging technology and markets, that’s a strong signal that a major change is under way — that we’re here to stay. At OPEN, we’ve seen the shift coming for years, so this excitement resonates in our offices. We can’t wait to do our part, an OPEN wallet for everyone, we say! As we gear up to launch a platform designed to support and foster the mass adoption of cryptocurrencies the world over, we hope you’ll join us.

Learn more about OPEN and our platform here.

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