Russia's 'Disappointing' Cryptocurrency Legislation: Why Experts Consider the Bill a Failure

Russia has been trying to pass cryptocurrency legislation since the beginning of January 2018, with no success as of yet.

Yuri Igorevich Pripachkin, the president of the Russian Association of Cryptocurrency and Blockchain, told Cointelegraph that the group was also consulted during the formation of the cryptocurrency bill, but that the bill still contains some unfavorable terms.

According to Pripachkin, the Russian cryptocurrency bill in its current form is "Far behind the ones which were accepted in Belarus, Kazakhstan and many other countries like Singapore, Switzerland."

"According to these draft laws, none of the existing cryptocurrencies, especially cryptocurrencies with nothing behind [them], for example, Bitcoin will be allowed in Russia. It wouldn't be under the scope of this legislation at all. According to the three bills, we can talk only about some kind of asset-based tokens, not about cryptocurrency."

In March of this year, a group of Russian deputies headed by the Chairman Aksakov submitted the first draft of legislation on cryptocurrencies and ICOs to the State Duma, as well as a draft of the bill "On Alternative Methods of Fundraising."

At the beginning of September, Dmitry Peskov, a special representative of the Russian president, said that Russia was not ready for the circulation and issuance of cryptocurrencies, as it "Contradicts the basic functions of government." Peskov notes that the best way forward to develop the cryptocurrency sphere legally in the country is to create a regulatory sandbox to analyze the different aspects of the crypto industry.

More recently, on Sept. 15, a lobby group of the Russian Union of Industrialists and Entrepreneurs announced that they were also working on an alternative crypto regulation bill in order to clarify the supposed contradictions in the existing bill "On Digital Financial Assets." This new bill is set to be developed by Russian businessmen, including two of the richest businessmen in the country: Vladimir Potanin, of the nickel and palladium mining and smelting company Nornickel, and Viktor Vekselberg, head of the Russian innovation fund Skolkovo.

Elina Sidorenko, the vice president of RSPP, explained that the new version of the alternative bill will divide digital assets into three groups: tokens, which will be equivalent to securities, cryptocurrencies, and digital 'signs.

Although President Putin himself instigated the now-passed deadline for cryptocurrency regulation, the country's leader has still not made any clear, definitive statements about the future of cryptocurrency in Russia.

Cryptocurrency use to avoid sanctions has become a topic worldwide after Venezuela, a country under international sanctions, created its oil-backed government cryptocurrency, the Petro, earlier this year.