Putin takes cautious approach to cryptocurrencies
Russia’s president Vladimir Putin addressed the topic of cryptocurrencies and blockchain during his annual “Direct Line” questions and answers session with the Russian public on Thursday night.
Putin’s comments were in response to three questions put by Artem Khokholikov:
- Will Russia have its own cryptocurrency one day?
- If so, will it be controlled by the government?
- Will cryptocurrency ever completely replace the rouble?
Putin answered the first two as one question, noting that cryptocurrencies cannot be owned by a centralised state as they are by definition decentralised.
He added: “Cryptocurrencies by definition are beyond the national borders.”
He remained cautious on practice of mining cryptocurrencies, saying that while it was unregulated, the state would continue to “treat if very carefully.
Russia must examine thoroughly the cryptocurrency phenomenon developing in the world, he said, to learn how it will “participate in the process” in the future.
But he was scathing in his comments about cryptocurrencies used as payment, saying it did not work in other countries and that the Central Bank of the Russian Federation “considers cryptocurrency neither a means of payment nor a store of value”.
He added: “Cryptocurrency is not backed by anything. One should treat it cautiously, carefully.”
Russia has been closely following the development of blockchain technology, however, and Putin believes the opportunities provided by blockchain should be explored.
Such opportunities included “avoid[ing] various limitations in global finance trade” – suggesting Putin believes the efficiencies provided by the technology could help ease the impact of sanctions on Russian institutions.
Russia currently has two cryptocurrency and blockchain-related bills on their passage through the State Duma. Both bills aim to introduce blockchain and crypto language into the country’s legal framework, paving the way for regulatory oversight of the sector.
Both bills have passed their first reading in parliament, and three rounds must be passed before legislation can be introduced.