The conference brought together state officials and business representatives to share their views on the legal status of cryptocurrencies in Russia. CoinFox reports from the event.
The one-day conference “Regulation of cryptocurrencies in Russia: Intermediate results” took place on 26 January at the Digital October event venue in Moscow city centre. Over 100 crypto and financial experts, entrepreneurs, blockchain and bitcoin enthusiasts attended the gathering. The discussion, chaired by one of the leader of Russian blockchain community and Head of Legal at Tech Group Deloitte CIS Artem Tolkachev, was opened by Ksenia Osipova from Deloitte CIS Law Group.
She reviewed the history of Russian regulators’ uneasy relations with cryptocurrencies and specifically dwelt on the last year’s open letter by the Federal Tax Service concerning taxation of cryptocurrencies. It was, according to her, the first real attempt of regulatory control of the market, however, lacking precise definitions. According to Osipova, there are three possible scenarios for Russian cryptocurrency market to develop: from the most negative when all cryptocurrency activities are banned to the most positive, that is, legal permission of payments in cryptocurrency. “We all expect from 2017 a real discussion and analysis to take place, which would enable us to carry on working with cryptocurrencies in this country,” she said in conclusion.
The second presenter, Elina Sidorenko, Professor of Criminal Law at Moscow State Institute of International Relations and the head of the State Duma’s interdepartmental task force on the cryptocurrencies risk evaluation, also noted the necessity to fill the “legal vacuum” around cryptocurrency technologies. Sidorenko confirmed that the official attitude towards cryptocurrencies is gradually changing: if earlier they mostly discussed the subject in terms of ban and prohibition, the more recent approach “may be described as ‘We will take our time to think’.” While the authorities are holding back from any decisions and observing other countries’ practices, there are serious obstructions on the way to creating a legal framework for cryptocurrencies in Russia. It is, first of all, the uncertain economic status of bitcoin (and other cryptocoins): whether it is a currency exempt from VAT or a commodity subject to taxation. The second problem is the legal definition of mining: whether it is a financial service liable to thorough regulation or production of a commodity.
The most probable regulation measure to be introduced, according to Elina Sidorenko, is compulsory licensing for crypto miners and exchanges – an initiative backed by the Federal Financial Monitoring Service. A consultation at the State Duma with the market experts and crypto developers concerning the legislation on cryptocurrency is scheduled for spring 2017.
Among the speakers at the conference were Waves platform’s CEO Sasha Ivanov, projects director at Sberbank’s Technological Innovations Centre Dmitry Bulychkov, Emercoin co-founder Stanislav Polozov and communications director at Qiwi Konstantin Koltsov.
All of them admitted that regulation of cryptocurrency in some form is a necessity, the more so as a total prohibition of the technology would be hardly possible and hardly practical since it offers a mighty potential for improvement of business processes. “Technologies often go ahead of legislation,” stated Sasha Ivanov, “and what we have now is virtually the Wild West.” Waves CEO believes that attempts to ban cryptocurrencies would only result in an “arms race” and advance of truly anonymous currency systems such as Dash, Zcash or Monero. Meanwhile, integration of cryptocurrencies into the economy could bring substantial benefits to Russia’s budget through taxation.
Sberbank’s Dmitry Bulychkov emphasised that having a legal definition for cryptocurrency is crucial, while for widespread adoption of blockchain the technology must have a legal status that would allow it to be used in courts of law together with traditional types of contracts. Stan Polozov from Emercoin compared the “legal vacuum” surrounding blockchain with the situation around dashboard cameras some time ago when their use as a means of proof with police authorities was not initially authorised but later they received that status.
Elena Platonova, Svetlana Nosova