Russia Considers Allowing Use of Cryptocurrency
in the Unbanked Region of Crimea
Russian Internet ombudsman Dmitry Marinichev suggested allowing the use of cryptocurrencies to residents of Crimea. In his opinion, legal entities and individuals registered in Crimea should be allowed to use cryptocurrency wallets and make transactions with digital currencies. Elaborating on his proposal, Marinichev suggested the opening of cryptocurrency exchanges, as he believes it will help attracting new investments to the region. He referred to the example of Hong Kong that has managed to create one of the biggest Bitcoin exchanges.
An important precondition for this initiative is the creation of a free economic zone within the peninsula.
Marinichev said at last week’s Conference on Regulation of Cryptocurrencies in Russia:
“Today Crimea is an exclusive economic zone, which makes it possible to start with the opening of cryptocurrency exchanges operating there absolutely legally. As a result, we will see the actual legalization of cryptocurrencies.”
Russia’s changing attitudes towards cryptocurrency
Elina Sidorenko, the Head of the Working Group for the Assessment of Risks of the Use of Cryptocurrencies at the State Duma of the Russian Federation, explained that recent legislation has addressed some of the most pressing issues in banking in Crimea. Bringing to the table cryptocurrency-based payment instruments and using it for international transactions was discussed among other initiatives to improve the banking climate on the peninsula. Eventually, however, this idea had died.
At the moment the status of digital currencies is not defined in Russian legislation, although in the last few years we have seen several attempts to put cryptocurrency into a legally defined framework. In December 2016, Alexey Moiseev, Deputy Finance Minister of the Russian Federation, announced that the Ministry of Finance is expecting to pass a law introducing a ban on exchange operations with Bitcoins and national currency not earlier than in Autumn 2017.
Meanwhile, some of the most influential banking industry players believe that Blockchain technology laying in the core of digital currencies is extremely valuable for the reshaping of a global financial system. For instance, experts in Sberbank, which has been actively testing technology during the last year, believe that by 2018 we will see a wider scope of application of Blockchain in the financial industry.
Banking the Unbanked with Bitcoin
It is often suggested that cryptocurrencies have significant potential to connect areas and people who have been neglected by traditional forms of banking to the global financial ecosystem. There is a number of huge developing markets, which still remain relatively untouched by modern banking services, however, they demonstrate the rapidly growing Internet infrastructures.
Alex Fork, CEO at Humaniq, the new-generation platform that makes basic financial instruments accessible to unbanked communities, shared his opinion:
“Unbanked regions usually consist of a financially poor population. The most important thing is to provide them with a new technology available absolutely free of charge. It is essential to deliver the service to the customer in such a way that they don't experience any difficulties.”
Everyone wins with Bitcoin
At the same time, we see that governments are extremely careful when it comes to regulating cryptocurrencies. Perhaps piloting projects in unbanked regions can create an extraordinary win-win situation. Individuals and companies who have been failed by traditional banking will be empowered with a new financial instrument, while regulators will get a perfect opportunity to experiment and innovate and finally make up their minds about how to treat this bizarre creation called Bitcoin.
What else can create a greater chance for the adoption of cryptocurrencies?
Alex Fork concludes:
“Of course, apprehension of governments regarding cryptocurrency is not only the innovation’s fear. The idea of testing the project within a small region of Russia is good. At least there will be an opportunity to practice and to gain some experience.”
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