Russian Crypto Industry Association Criticizes Government for Doing Nothing” to Regulate Sector – Regulation

The main organization representing participants in the Russian crypto space has criticized authorities in Moscow for not doing enough to regulate the industry. The criticism comes four years after President Putin ordered institutions to legally define the status of digital financial technologies.

Regulators are accused of failing to bring the Russian crypto market out of the shadows

Russian regulators have been criticized for their actions regarding the cryptocurrency industry in the country. According to Yuri Pripachkin, head of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain ( Ratibus ), their actions are still “half-hearted” and are not aimed at finding a systematic solution to Russian state policy in the area of ​​digital assets.

Speaking to the business news portal RBC, Pripachkin recalled President Vladimir Putin's order of October 21, 2017, in which the Russian leader commissioned the adoption of legislation defining the legal status of digital technologies used in the financial sector by July 2018. The president of Racib, formerly known as the Russian Association of Crypto Industry and Blockchain, noted that since Putin issued the order, the crypto market capitalization has increased by 1,250%.

Pripachkin further emphasized that “from the point of view of regulating the crypto industry in the Russian Federation, according to its authorized representatives, absolutely nothing has been done to stimulate the domestic segment of this market (with a share of more than 10% of the global one), with revenues comparable to the annual federal budget revenues ($270 billion).”

Cryptocurrency matters in Russia remain only partially regulated following the adoption of the Law “On Digital Financial Assets,” which came into force in January this year. While it provides some regulatory clarity regarding these currencies, no rules have been introduced to regulate their issuance and circulation in the country's economy.

Pripachkin pointed out that the term “smart contract” is nowhere to be found, neither in the laws that have already been adopted nor in the draft laws currently being considered. Then there is Crypto mining, which is not banned in Russia but remains unregulated. The Racib official added that there had been no progress on any of the other instructions in Putin's order and provided another example:

Despite the creation of a regulatory sandbox in 2018, not a single public blockchain project submitted for testing has received approval from the country's main financial regulator due to the Bank of Russia's incompatible position towards cryptocurrencies.

The Central Bank of Russia ( CBR ) stubbornly opposes the legalization of cryptocurrencies such as Bitcoin in Russia. The monetary authority considers them as Monetary replacement which are prohibited by applicable Russian law. Earlier this year the bank advised Exchanges against listing financial instruments tied to crypto assets. This week its governor, Elvira Nabiullina, said the CBR was not ready to allow trading in Bitcoin ETFs.

In a situation dictated by inadequate and opaque legislation, Russian crypto users are forced to export funds worth an estimated 18 trillion rubles ($255 billion) outside the Russian economy, Pripachkin noted. This is comparable to the total revenue of the Russian federal budget for the whole of 2020, or about 20 trillion rubles, said the head of Racib.

Do you think the Russian authorities will listen to Racib's criticism? Tell us in the comments section below.

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