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Putin’s Bitcoin Regulation Deadline Might Not Lead to Actual Crypto Rules

Last Updated March 4, 2021 2:54 PM
Samantha Chang
Last Updated March 4, 2021 2:54 PM

Bitcoin sceptic Vladimir Putin has set a July 2019 deadline for crypto regulations to be put in place in Russia. Putin made the announcement on the Kremlin website in a February 27 notice.

In his order, President Putin told the Russian State Duma and the Council of the Federation of Russia to adopt cryptocurrency rules by July 1.

The regulations are designed to promote the digital economy in Russia, which is struggling financially amid US economic sanctions.

Previous July 2018 Deadline Largely Ignored

It’s unclear whether these rules will be adopted, since Putin had previously set a July 2018 deadline for the implementation of guidelines for bitcoin trading, initial coin offerings, blockchain, and crypto mining. Those regulations never really materialized.

Moreover, Vladimir Putin is not a bitcoin fan. Putin has expressed scepticism about cryptocurrencies because they are unregulated and are not backed by a central bank. However, he has since softened his stance – at least a bit.

Vladimir Putin: Crypto Attracts Criminals

In 2017, Putin warned Russians about the risks posed by cryptocurrencies. Specifically, he said bitcoin attracts criminals  because of its anonymous nature.

“[The risks include] opportunities to launder funds acquired through criminal activities, tax evasion, even terrorism financing, as well as the spread of fraud schemes.”

Russia’s central bank echoed Putin’s anti-crypto sentiments, and called virtual currencies a pyramid scheme:

“We have seen how bitcoin has transformed a payment unit into an asset, which is bought in order to obtain a high yield in a short period of time. This is the definition of a pyramid.”

Fake News Touts Russian Bitcoin Buy

In January 2019, a Russian state official denied reports that Russia was planning to buy $10 billion in bitcoin during the first quarter to mitigate the harsh impact of US economic sanctions.

The rumours were started on Twitter by Russian economist Vladislav Ginko, who works at the state-funded Russian Presidential Academy of National Economy.

Elina Sidorenko is the chairwoman of an interdepartmental working group of the State Duma for managing risks of cryptocurrency turnover. She called the fake-news reports nonsense.

Moreover, Sidorenko said cryptocurrencies will probably not be implemented in Russia for at least the next 30 years.

“This statement has no common sense,” Sidorenko said. “The Russian Federation is simply not ready to combine its traditional financial system with cryptocurrencies.”

“And to say that this idea can be implemented in Russia for at least the next 30 years is unlikely.”

russia bitcoin rumor
Elina Sidorenko of Russia’s State Duma says the country isn’t going to invest in bitcoin anytime soon. | Source: Youtube/Life Upgrade

Notably, Sidorenko cited the lack of formal crypto regulations in Russia as a major reason for why bitcoin won’t achieve mainstream adoption anytime soon.

“Even if Russia wants to place its cryptocurrency assets now, it simply cannot do this.”

“We do not have any mechanisms that would allow us to introduce a system: where these assets would be stored, which authorities would be responsible for it, which would be responsible for abuses and stuff.”

“Such a model under the current criminal, financial and civil legislation does not fit. All over the world, cryptocurrency is considered a high-risk asset. And a similar model, naturally, would not suit anyone.”