The Russian Ministry of Finance has announced its intention to introduce KYC guidelines for cryptocurrency purchases, amidst increased user adoption across BRICS nations.
Russia Has Come a Long Way in Recent Months With Regards to Its Regulatory Position on Cryptocurrencies
The move in favor of greater identity verifications being introduced for cryptocurrency purchases comes following a string of announcements expressing a desire to move toward more permissive, regulated legal apparatus surrounding the circulation of digital currencies within Russia.
The announcement comes less than two months from the expected completion of the Russian Ministry of Finance’s drafting of regulatory proposals for the cryptocurrency economy. The proposals are expected to comprise an expansion upon current legislation applying to financial instruments like derivatives.
Russia has come a long way in recent months with regards to its regulatory position on cryptocurrencies. Russia attracted great attention in early 2016 after considering introducing legislation that would to jail cryptocurrency users, following several years of erratic tooing-and-froing with regards to bitcoin’s legal status.
Russia Has Taken Further Steps Towards Embracing Cryptocurrency
In December 2016 a Russian Federal Tax Service Letter surfaced that implied cryptocurrencies are not prohibited.
Further clarity was provided in April of this year when reports surfaced that Russian Deputy Finance Minister Alexey Moiseev had announced Russian intentions to recognize Bitcoin as a legitimate financial instrument during 2018 in a bid to fight money laundering.
Since April, Russia has taken further steps towards embracing cryptocurrency. In May, Russia’s largest online retailer Ulmart announced that it would be incrementally moving toward accepting bitcoin payments for select items, just weeks before Olga Skorobogatova, the Deputy Governor of the Central Bank of Russia, revealed a proposal to classify bitcoin and other cryptocurrencies as ‘digital goods’ for taxation purposes. The move was well received by Russia’s banking sector, with the head of Sberbank German Gref issuing a statement that expressed his desire to have a sensible and pragmatic discussion with regards to cryptocurrencies, as previous attempts to prohibit virtual currencies had been largely problematic.
In recent weeks The Kremlin has appeared to hasten their move toward integrating cryptocurrency into the Russian economy. During June Vladimir Putin met with Vitalik Buterin – who was invited to speak at the St Petersburg International Economic Forum. During the event, Central Bank Deputy Governor Skorobogatova confirmed rumors that the central bank is developing its own digital currency. The forum took place after a recent announcement by Skorobogatova that the Central Bank and Eurasian Economic Community would be embarking upon a joint project to use blockchain technology for financial services.
Many analysts are suggesting that recent moves on the part Russia and major alternate economic powers’ toward exploring more permissive bitcoin regulations show a recognition that cryptocurrencies can be used as a means to disrupt the economic status quo, which is currently one of US hegemony.
In the last year Japan, India, South Korea, Iran and South Africa have all seen dramatic increases in cryptocurrency adoption, and most have responded by introducing permissive regulatory frameworks that will foster further development within the emerging cryptocurrency industry.
As the US’s share of the cryptocurrency increasingly wanes, many in the experts are speculating that the current international cryptocurrency landscape comprises a reflection of broader shifts in the global economy.
Do you think that Russia will be able to effectively regulate the cryptocurrency industry? Share your thoughts below!
Images courtesy of Shutterstock.