Russian President Vladimir Putin has announced by decree a slew of new regulations on cryptocurrencies and ICOs, as regulators worldwide continue to develop their approach to blockchain technologies.
The Russian President, who has led an administration that has become known for its hardline approach to the new technology, announced the new regulations over the weekend, in what has become the most significant government intervention in the emerging industry to date.
Among the orders issued were rules applying securities compliance laws to ICOs, as well as requirements for cryptocurrency miners to pre-register their details with the government.
Importantly, the decrees are also said to be part of plans that would see an ambitious ‘single payment area’ across the Eurasia block, which would ultimately rely on blockchain technology and would expand beyond Russia to include other regional states, such as Armenia and Kyrgyzstan.
According to the detail of the decrees, the Russian government is throwing its support behind efforts in the State Duma and the country’s central bank and financial regulators, in establishing a more solid legal framework for dealing with cryptocurrencies and associated technologies.
“The Government of the Russian Federation, in conjunction with the Bank of Russia, shall ensure that changes are made to the legislation of the Russian Federation providing for…[the] determination of the status of digital technologies used in the financial sphere and their concepts (including such as “technology of distributed registries”, “digital letters of credit”, “digital mortgage”, “crypto-currency”, “token”, “smart contract” “) [b]ased on the obligation of the ruble as the only legal tender in the Russian Federation.”
As part of the proposals, the Russian authorities will also establish a regulatory sandbox for startups and other blockchain development projects, echoing similar moves by regulators elsewhere, including in the UK.
The development is one of the most significant interventions by any national government in the space to date, and reflect increasing pressure globally to find regulatory solutions to emerging challenges posed by these new forms of investment.
While many countries have so far held off from increasing regulation, Russia and China have been amongst the most aggressive in asserting state control.
But with many analysts saying the market, particularly in cryptocurrencies, is fundamentally impossible to regulate, it remains to be seen whether Putin’s approach will have the desired effect.