G20 Hamburg Summit , an international forum for the governments and central bank bank governors from 20 major economies, was held recently.
Russia’s President, Vladmir Putin emphasized the importance of digital technologies in this digital age at the G20 Summit.
The Russian President said:
“The global economy’s transition to a new industrial order is underpinned by the development of digital technology. We believe that the G20 could take on a leading role in shaping international regulations in this area.”
Though this is a very general statement for technology sector, the Russian President may be hinting for regulation of Bitcoin and cryptocurrency market.
Recently, Russian President also met Ethereum founder Vitalik Butterin. The president praised Ethereum smart contract technology.
The Russian president also showed his interest in integrating Ethereum Smart contract technology in Russian banking sector.
Initially Russia was against Bitcoin. It even enforced imprisonment, if any citizen was found either trading/investing or holding Bitcoins.
With rapid increase in popularity and mass adoption, Russia changed it’s view and hinted to regulate Bitcoin in 2018.
A few weeks ago, Ogla Skaorobogatva, Deputy Chairwoman of Russian Central Bank mentioned that the Central Bank had a meeting with Ministry of Finance, Ministry of Economic Development and other law enforcement agencies in order to plan out as to how to monitor and tax the transactions carried out in Bitcoins.
According to the Russia’s Central Bank’s deputy chairwoman, Olga Skaorobogatva, the central bank is preparing legal drafts and papers to recognize and monitor the transactions carried out in digital currencies.
Skaorobogatva also mentioned that “The preliminary draft regulation could be presented to the Russian State Duma, the lower chamber of the Russian Parliament, as soon as June”, while speaking at the Parliament.
Russia is looking to regulate Bitcoins as a commodity and tax it accordingly, rather than a currency. Many countries perceive and consider Bitcoin as a commodity, such as China.
In an interview with CNBC, Elvira Nabiullina, governor of the Russian Central Bank, stated:
“We don’t consider that Bitcoin can be considered as a virtual currency. It’s more digital assets with the regulation of assets. We have some doubts, we don’t see some huge benefits from introducing digital assets in our economy.”
The Russian Central Bank is likely considering the growing demands toward Bitcoin from casual traders and institutional investors.
It is also likely that Russia will regulate Bitcoins to prevent the Bitcoin exchange market from going underground and to black markets, which are harder to regulate and track/
Russia is still yet to legalize and regulate Bitcoin.
Over the past two years, Bitcoin has been regulated and legalized in a number of countries including Japan, South Korea, US, Australia, the Philippines and Europe.
Japan legalized Bitcoins and recognized it as a legal mode of payments.
Australia recognised Bitcoins and mentions it can be used “Just Like Money”.
India is also set to legalize the digital currency any time soon. It had initially established a committee to review and examine virtual currencies such as Bitcoin. The committee reviewed it and gave positive response to Bitcoins.
Another task force committee has been set up to further examine Bitcoin from regulation point of view.
Recently the Finance Minister of India, Mr. Arun Jaitley held a private meeting with top officials to discuss about Bitcoins.
The vast majority of countries participating in the G20 summit including China, Japan, the UK and the US have regulated Bitcoin, while Russia and India are yet to provide regulatory clarity on Bitcoin, cryptocurrency trading and operations.
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