Late last week, Russian Finance Minister Anton Siluanov told reporters that his ministry was drafting plans to regulate both cryptocurrencies and initial coin offerings (ICOs). The move comes as a surprise, as only last year the ministry proposed criminal charges — with a maximum sentence of seven years in jail — for those dealing in cryptocurrencies. While there has been something of a thaw in the Russia government’s stance on cryptocurrency-based business, due in part to a meeting in June between President Vladimir Putin and Ethereum founder Vitalik Buterin, the announcement shows a welcome shift in Moscow’s view on blockchain-based technology and investment.Speaking to reporters in Moscow, Siluanov said: “The state certainly understands that cryptocurrencies are a reality, there is no point in prohibiting them. It is possible to regulate them, so the Finance Ministry will draw up a bill by the end of the year.”
There have been hints that Russia’s stance on ICOs was softening, such as the recent announcement of a $100 million ICO by Putin staffer Dmitry Marinichev to fund a massive cryptocurrency mining operation in the country. The state-owned Sberbank has also been actively testing blockchain-based applications in banking, adopting the Ethereum-based Masterchain protocol in a payment network shared with Bank Otkritie, Alfa Bank, Tinkoff Bank, and Qiwi. With the threat of criminal prosecution for cryptocurrency-tied activity now seemingly a thing of the past in Russia, such investments may soon become commonplace in the country.
The move puts Russian cryptocurrency investors in much the same situation as those in the U.S. or Canada, where financial authorities have largely opted to take a wait-and-see approach. Although the U.S. Securities and Exchange Commission (SEC) has recently issued some warnings about fraudulent ICOs and scams, the agency has generally avoided intervention into the ICO space. Canada’s approach is even more friendly, with regulators at Quebec’s Autorite des Marches Financiers (AMF) officially approving an ICO for the “socially responsible” banking startup Impak Finance.
Russia’s new policy also comes mere days after the Chinese central bank moved to shutter all ICO activity in the country, pending further investigation by authorities. Initially seen as an outright ban on ICOs, the move has since been interpreted by many within China as a prelude to state-controlled ICO markets and crypto exchanges. Given that both Russia and China have a long history of skepticism — and even hostility — towards cryptocurrencies, these recent actions suggest those attitudes may be rapidly changing as global finance moves towards blockchain-based innovations.