Government Expert: Russia Not Ready for Issuance and Circulation of Cryptocurrencies

A special representative of the Russian president said that the country is not yet ready for the circulation and issuance of cryptocurrencies, according to local news agency RIA Monday, September 10.

The president’s Special Representative on digital and technological development Dmitry Peskov explained his view on the state of digital assets in an interview with RIA:

“From the start, we have not legally suppressed blockchain and cryptocurrencies, and are trying to bring them into a normative space. But the government must give fair warning, that there is a high risk of ending up with an MMM 2.0 [famous pyramid scheme that existed in 1990s].”

Peskov stated that the official position of the Russian Central Bank on crypto was too soft. "The threat level is so high that the position could be stricter," he said. Furthermore, Peskov argued that the issuance of cryptocurrencies is contrary to basic state principals:

"The issuance and circulation of cryptocurrencies cannot yet be permitted. It contradicts the basic functions of government. Order is important. If we adopt a bill on the principles of working with cryptocurrencies on the government level, then we can discuss the implementation of those principles in daily life. But it’s not right to do this in reverse."

According to Peskov, the best move forward for the legal development of the cryptocurrency sphere in the country would be to create a regulatory sandbox to analyze “all aspects of work” with cryptocurrencies.

Peskov, who is not to be confused with the Kremlin press secretary and Presidential Deputy Chief of Staff of the same name, was named a special representative by presidential decree in July 2018. Peskov is also the Director of Young Professionals at the Agency for Strategic Initiatives.

Earlier this year Russian president Vladimir Putin himself addressed the crypto question during his annual live question and answer session. Putin said that Russia cannot have its own cryptocurrency, as cryptocurrency “by definition” cannot be controlled by a centralized entity. He also noted that while the government does not regulate crypto mining, it “treats it very carefully.”

The legal status of cryptocurrencies, mining, and Initial Coin Offerings (ICOs) in not yet clearly defined in Russia. A draft law "On Digital Financial Assets," which was prepared by the Russian Ministry of Finance in March, 2018, was accepted by the State Duma in the first of three readings in May. According to RIA, the second reading will take place sometime this autumn.