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Kremlin For The Win? Russia To Regulate Cryptocurrency Markets

· September 9, 2017 · 9:00 pm

Russia’s Finance Minister announced the government’s goal of legalizing and regulating the circulation of cryptocurrencies. Unlike China, Russia will not outright ban ICOs as it plans to take full advantage of this new financial technology.


Although a segment within the Russian administration has not given its backing to cryptocurrencies, most of the evidence and recent developments in the country point towards a push from Kremlin to become the world’s most powerful country on the back of its early adoption of artificial intelligence.

‘Securities’ Regulation

Finance Minister Anton Siluanov declared on Friday that the government will regulate cryptocurrencies as securities, telling reporters in Moscow: 

The state certainly understands that cryptocurrencies are a reality, there is no point in prohibiting them. It is possible to regulate them, so the Finance Ministry will draw up a bill by the end of the year.

A law will be drafted by year’s end by Russia’s Finance Ministry to define a procedure for, and register, those willing to buy cryptocurrencies. Just like treasury bonds, these digital currencies will be treated as securities. However, it remained unclear exactly what kinds of cryptocurrency transactions would be subject to federal regulations.

After China decided to outlaw ICOs and close domestic trading cryptocurrency platforms earlier this week, Siluanov said Russia wants to “make investments into such instruments regulated…. We must make an organized market out of the black market.”

Power Struggle? Central Bank vs. Finance Ministry

The Russian central bank has twice criticized cryptocurrencies in the past week, stating that their use was aiding and abetting “illegal activities, including legalization (laundering) of proceeds from crime and financing of terrorism”. Central bank Governor, Elvira Nabiullina, warned against the cryptocurrency “bubble” and likened it to “gold fever”, vowing to prevent its use as “surrogate money”.

Similarly, European Central Bank’s president, Mario Draghi, has rejected a proposal by the Estonian government to launch a state-managed cryptocurrency. The general trend, therefore, seems to be that central bankers are very worried about losing control over the circulation of money. They seem prepared to go to any lengths to prevent the centralized adoption of cryptocurrencies as legal tender, often under the guise of protecting against risks associated with a “stateless and unregulated” technology.

Kremlin’s Push Toward Adopting AI

Putin famously remarked earlier this month:

The future belongs to artificial intelligenceWhoever becomes the leader in this sphere, will become the ruler of the world. 

A string of recent developments clearly demonstrate a conscious effort by the government to fund and create these AI innovations, much of which will be achieved through cryptocurrencies and their underlying blockchain technology. Putin gave his complete backing to the half-Russian founder of Ethereum, Vitalik Buterin, when they met a few months ago to discuss how to increase its local adoption.

Russian Miner Coin, RMC, a company co-owned by Putin’s internet ombudsman, has informed Putin of their plan to raise $100 million to usurp China and make Russia the world’s undisputed leader in cryptocurrency mining. Russia’s National Settlement Depository (NSD) for the Moscow Stock Exchange is already in the process of developing a blockchain platform that aims to build a ledger system to account for crypto-currency trades. 

Various other projects, such as Masterchain, have received a warm embrace from Russian authorities who are looking to get ahead of other countries by getting in the technology game early. Putin has now even called on his country’s IT companies to use Russian domestic software to combat the “high security risks” of ‘foreign’ products.

What do you think about Russia’s decision to regulate cryptocurrencies as securities? Are the central bankers’ worries justified or are they uncalled for? Do you believe Putin can make Russia the strongest power by adopting AI in its nascent stage? Let us know in the comments below.


Images courtesy of Wikimedia Commons, Twitter

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Led 23

Russia Blocks Online Bitcoin Exchange in Midst of Blockchain Reform

Source: bitcoin

Russia

Russia blocks one of the largest running cryptocurrency exchanges, BTCe, following BitStamp’s voluntary IP block of its Russian users. These developments are likely a preview of what is to come from enforcement of recent laws criminalizing blockchain technologies and ‘money substitutes’ in the Russian market.

Also Read: The Netherlands Wants Clear Regulatory Guidelines For FinTech and Bitcoin Startups

Russia Can’t Make Up its Mind on the Blockchain

More baffling still is the fact these moves to shut down Bitcoin exchanges are coming after last month’s announcement of a ‘clear road map’ to legalize cryptocurrency in Russia.  This roadmap is a facet of a proposal to deregulate the IT sector called “internet program 2025.” Russian officials claim that only bitcoin, not blockchain technology, is  illegal but refused the legal creation of a Russian altcoin, dubbed BitRubles, by payment processor Qiwi following the passing of this proposition.
Bitcoin ownership in Russia is a criminal offense that carries a maximum four-year sentence and up to 500,000 Rubles (~$19,000 USD.) As it stands, there’s no regulatory framework to enter the crypto market there legally despite conflicting stances of different Russian government bodies on the subject. With the enforcement and legislative sides of this issue seemingly headed in opposite directions, it’s hard to make sense of the crackdown on the online markets as it stands.

A possible explanation for the recent criminal enforcement measures could be the price drop of the Ruble due to falling oil and economic sanctions. The Russian central bank, vocally against Bitcoin and blockchain tech. in general, may be pushing for enforcement to prevent capital outflow that could worsen their situation. With no clear stance on Blockchain implementations outside of Bictoin, and no decriminalization efforts for bitcoin proper, legitimate Bitcoin ownership and  investment remains difficult to impossible.  Until there’s a compliant regulatory ecosystem for crypto in Russia, expect the situation to escalate accordingly.

What are your thoughts on the Russian treatment of bitcoin and of Cryptocurrency regulation in general? Be sure to let us know in the comments!


Source: Forklog

Image courtesy of beastcoins.com

The post Russia Blocks Online Bitcoin Exchange in Midst of Blockchain Reform appeared first on Bitcoinist.net.

Russia Blocks Online Bitcoin Exchange in Midst of Blockchain Reform

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