Crypto and ICO regulations in Russia to be completed by July 2018

In order to regulate the use of digital assets, including cryptocurrencies, their miners, as well as ICOs in the country’s financial sector, Russian president, Vladimir Putin, has now issued five orders in addition to having announced the country’s national cryptocurrency last week.

To make the tracking of digital technologies possible, the first order instructs the government to “ensure that changes are made to the legislation of the Russian Federation” and this is to be “based on the obligation of the ruble as the only legal tender in the Russian Federation.” These technologies include cryptocurrencies, tokens, and smart contracts.

The Central Bank governor reportedly said last month, “the use of cryptocurrency as a monetary surrogate is actively proposed for the calculation of goods and services, we will not allow the use of cryptocurrency as a money substitute.” Deputy Finance Minister, Alexei Moiseev, has suggested that cryptocurrencies be allowed for use as financial assets by qualified investors.

Interest in mining has grown significantly in Russia. According to Google, the number of mining-related searches in the country increased by 560% in the first half of this year.

In the second order, Putin orders to make amendments in the legislation in order to make it easier for organizations that are engaged in cryptocurrency mining can be easily regulated. According to the order, this includes “the registration of economic entities carrying out such activities, and determining the procedure for their taxation." Proposals were put forward this month by the Russian Finance Ministry to register miners and license cryptocurrency exchanges dealing with them.

The third order is for the regulation of ICOs. Government and the central bank are instructed to modify legislation accordingly. First Deputy Prime Minister, Igor Shuvalov, and the President himself have assured that these regulations will not kill the ICOs, saying that they hold tremendous potential. The Russian Association of Blockchain and Cryptocurrency, and another working group at the State Duma, are separately working on proposals aimed at legalizing ICOs.

The responsibility to complete these three orders by July of next year has been given to the country’s Prime minister and the Central Bank's governor. They have been ordered to submit two additional proposals as well. The first is to form a regulatory sandbox for financial technologies, and the second is to use blockchain technology to create a single payment space. The first proposal is to be completed by December, and the second by March of next year.