A head of a State Duma committee believes it is a perfect moment to use the technology both to break through financial barriers and help domestic business to leap forward.

Russian entrepreneurs should feel free to use the blockchain to circumvent economic sanctions imposed by the US and EU on the country’s financial institutions, argues Andrey Lugovoy, Deputy Chairman of the State Duma Committee on Security and Anti-Corruption. This way they can both advance their business and benefit the state economy.

“Blockchain-based projects are, in fact, the rare case when these two goals are fully aligned. …It is a rare sphere where the Western sanction policy gives the domestic business a chance to approve itself and create something new that will help the national economy to make a leap forward,” Lugovoy said.

Blockchain, in his view, can be used for such purposes as insurance, property registration, patents and copyright registration, e-voting, medical records and securities depositories.

He appeals not to ban cryptocurrencies underpinned by the blockchain technology from circulation in Russia. Many countries that try to limit bitcoin circulation also impair blockchain implementation, he argues. While eliminating certain economic risks associated with the cryptocurrency, they cause a bigger damage to national economies because it impedes the adoption of new data transfer technologies.

Dmitry Marinichev, the president’s Internet Ombudsman, has also spoken in favour of unrestrained advance of the blockchain technology. However, he noticed, it would be difficult to achieve without an open support on behalf of the state.

He called "a sheer nonsense” the measures promoted by the Ministry of Finance against cryptocurrencies and bitcoin in particular.

Earlier Lugovoy made the famous claim that Russia ranks number five in the world by the number of bitcoin users, which is nearing 200,000. He proclaimed then that cryptocurrencies should be not banned but regulated.

The economic sanctions affecting a large number of Russian financial institutions were imposed, primarily by the US and the European Union, in response to Russia’s annexation of Crimea in March 2014. As a result, Russian banking sector has been facing limited access to external capital markets.

Elena Platonova