Russian authorities want Putin to involve in crypto regulation

After a high institutional clash on plans for cryptocurrency regulation a while ago, Russian crypto authorities have appealed to President Vladimir Putin to stimulate regulatory efforts. The request sprouts from fears that the Russian Federation could lag behind other countries if it keeps operating on a rather conservative approach toward financial technologies.

Russia eyes to be a global leader in digital payments

The Russian Crypto Industry Association, comprising the Russian Association of Cryptoeconomics, Artificial Intelligence, and Blockchain (Racib), has appealed for President Putin's involvement in crypto.

In the open letter to the head of state, the association wants the high office to help structure the country's regulatory framework for crypto and related technologies.

The letter calls for Putin's attention to the government's demeanor towards the digital asset regulation process, citing:

Serious risks of the economy lagging behind in the introduction of new financial technologies."

According to the association, the current state policy bars Russian businesses from leveraging the potential of new financial infrastructure. This compels them to shift to other jurisdictions, which results in direct financial losses for Russia's treasury. A paragraph in the organization's address to the president reads:

[This] extremely conservative and prohibitive approach may cause Russia to lose pace in the development of the digital economy…."

The excerpt hints at Russia's intention to become a global leader in digital payments and accounting systems.

Racib also used the address to remind the head of state about his 2019 meeting with the country's IT associations to discuss new legislation. From the letter, despite Putin's promise of experimental legal regimes for fintechs, they have never been implemented. Moreover, the proposed changes to the country's digital financial assets laws make digital technology implementation harder.

Notably, the letter was co-authored by Russoft, a non-profit partnership of software developers. On their part, Russoft asked the high office to call a meeting specifically for the issues mentioned and involve crypto stakeholders.

They also proposed a working group to design a pilot project introducing digital financial technologies. This would include cross-border payments to serve Russia amid the war-provoked sanctions.

Russia doubling down on crypto

Russia has been doubling down on its crypto adoption efforts, bolstered by the recent launching of an investment fund for financing cryptocurrency mining projects. This move signified the industry's victory over regulatory hurdles and hostile stances from key arms of government.

Russian business news source Kommersant recently revealed that investors with at least 300,000 rubles (approximately $4,000) could participate in the scheme. The 300K rubles is the capital needed to buy the requisite hardware and pay for energy and operating expenses, among other related costs.

Russia’s paradigm shift

These developments come a year after Russian authorities clashed when the finance ministry submitted legislative proposals conflicting with the central bank's demand for a blanket ban. The Bank of Russia suggested a total ban on cryptocurrency trading and mining because digital currencies threaten financial stability.

The finance ministry disagreed with the proposal, provoking President Putin to call on authorities to find a consensus. 

Notwithstanding, Russia currently offers favorable conditions for its mining operations courtesy of good climate and affordable energy sources. As Western sanctions continue to impact regular industries, digital assets are presented as the best alternative for Russia as far as economic resources are concerned.