In as little as one-and-a-half years, the Russian economy is reported to have lost approximately $2 billion as a result of the unregulated cryptocurrency market. This information was published in the press service of the Russian Association of Cryptocurrencies and Blockchain (RACIB).
In response to that information, the Russian President Vladimir Putin ordered the government on February 27 to coordinate with the State Duma to create and pass laws before July 1 targeting the development of the digital economy. Some of the notable proposed laws include those determining the procedure for conducting various civil law transactions in electronic form.
Also, the president wants the provision of viable regulations to manage the digital financial assets which, in turn, will attract financial resources and investments using digital technologies.
Originally, a project on the regulation of digital assets in the Russian Federation was scheduled to create cryptocurrency laws and regulations on behalf of Putin in the first half of 2018.
Lost Around $2 Billion
Rakib believes that within the time since the president’s first instruction, the national economy lost around $2 billion in the unregulated crypto markets. The agency’s source also said that the Russian Federation loses foreign exchange earnings of at least $ 300 million annually due to the outflow of Russian miners Commissions.
The outflow of Russian IT developers and specialists abroad is consistently growing. Currently, over half of the teams around the world implementing projects in the blockchain and cryptocurrencies fields have Russian-language roots. Experts believe that the lack of any cryptocurrency legislative regulation in the country is the primary hindrance to the technology’s development.
The press service also added that the adoption of laws will let the market thrive away from the gray zone becoming an economic growth driver for individuals and institutions that can legally operate for the benefit of the general Russian economy. The president gave a similar order for the regulation of the crypto markets in the country for the first time in October 2017.
The government is set to work in conjunction with the Central Bank to fulfill this urgent order from the president. In March 2018, three bills were passed on the parliament’s first reading that aimed to generally regulate the digital economy. RAKIB does not support these projects since they have no “cryptocurrency” and “mining” definitions. Moreover, they do not describe the totality of business relations that arise between the participants in the cryptocurrency market.
On February 26, TACC reported that cashing in cryptocurrencies falls under the norms of the article of the Criminal Code of the Russian Federation on money laundering. In addition, Alexander Chervotkin noted that in Russia’s court practice there are already examples of cases on the illegal use of virtual currencies.
“We have specific convictions that have established that criminal revenues in cryptocurrency, including from the sale of narcotic drugs, were later transformed into monetary funds by means of a number of financial transactions and were transferred into circulation by withdrawing it to bank accounts,” Chervotkin said.