Russian President Vladimir Putin has spoken out on cryptocurrency, suggesting Russia may require cryptocurrency regulation to provide certainty to the blossoming sector.
In the latest pronouncement to come from the upper tiers of Russian government in recent months, Putin suggested to local media that regulation will be required, and this is within the remit of the central bank in shaping the approach.
According to translations of local media reports, Putin is quoted as recognizing challenges, as well as opportunities, in the use of cryptocurrencies and underlying blockchain technologies.
“This is the prerogative of the central bank at present and the central bank has sufficient authority so far. However, in broad terms, legislative regulation will be definitely required in future.”
“It is known that the cryptocurrency is not backed by anything. It cannot be a store of value. No material valuables are behind it and it is not secured by anything…It can be a settlement medium to a certain degree and in certain situations. This is done quickly and efficiently.”
The comments will be welcomed by those operating in the cryptocurrency space in Russia, and come off the back of recent meetings with ethereum founder Vitalik Buterin over the last few weeks.
However, they stand in contrast to previous comments from senior Russian sources, including from Russia’s Prime Minister Dmitry Medvedev, who said that while the underlying technology could prove important, cryptocurrencies can easily ‘disappear’.
“Cryptocurrencies can also disappear in an exactly the same way in several years and the technology being the basis for their development – blockchain – will become part of everyday reality.”
Russia’s much debated cryptocurrency regulation is expected to be brought forward in February, and analysts will closely scrutinize the provisions to identify how they impact on the nascent blockchain industry.
To date, Russia has blown hot and cold with cryptocurrencies and blockchain technologies, and was initially one of the most restrictive countries in its approach to developments.
But in recent months, a notable softening of the position has led some analysts to conclude that the eventual regulations will be less restrictive than some had feared.