Putin Asks Russia’s Central Bank to Stand Down Over Cryptocurrency Ban

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Vladimir Putin, Russia’s President, had a meeting “on using digital technology in finance” yesterday, attended by Presidential Aide Andrei Belousov, Finance Minister Anton Siluanov, Central Bank Governor Elvira Nabiullina, Central Bank Deputy Governor Olga Skorobogatova and Sergei Solonin, CEO of QIWI, a Russian payments service provider that operates online payment systems.

Opening the meeting, he said the topic was “introducing digital technology in the financial, banking sphere, and using innovative financial instruments,” before stating:

“As is known, virtual currencies, also known as cryptocurrencies, are becoming or have already become very popular; in certain countries they are becoming or have already become legal tender, as well as an investment asset.

I would like to draw your attention to the need to use the advantages that are offered by new technological solutions in the banking sphere.”

That makes him the first sitting President or equivalent Prime Minister to utter the words cryptocurrency, which he says “also carries serious risks,” before giving a hint of why this meeting was held:

“I know the Central Bank’s position; I have discussed this topic with the Governor on several occasions,” Putin said, before giving a list of potential risks, including money laundering and scam frauds. However, he says:

“We need – based on international experience – to build a regulatory environment that will make it possible to codify relations in this sphere, reliably protect the interests of citizens, businesses and the state and provide legal guarantees for using innovative financial instruments.”

It’s unclear which international experience he is referring to. The central bank likely prefers the Chinese way, but Putin clearly doesn’t.

He doesn’t have a better place to look than London as far as regulations regarding this space are concerned, especially the sandbox which hopefully will be extended to ICOs, but whether Russia can show such great foresight as the free people remains to be seen.

However, Putin makes it clear that the invention of bitcoin and other digital currencies together with the systems underlying them are an “upgrade.” He says:

“I would like once again to draw your attention to the need to use the advantages that are offered by new technological solutions in the banking sphere.

At the same time it is important not to create unnecessary barriers, of course, but rather to provide essential conditions for advancing and upgrading the national financial system.”

It is unclear whether this was a scheduled meeting or whether it was held in response to comments made yesterday by Sergei Shvetsov, First Deputy Governor of Russia’s Central Bank, who said the Central Bank:

“Will block access to websites of exchanges that offer crypto-currencies such as Bitcoin,” before further adding “We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors).”

That’s now clearly not happening, unless they try to undermine Putin himself, who apparently has caught the blockchain bug and is “ill” with the idea.

It appears Russia is proud of one of their sons of sorts, Vitalik Buterin, who was born in the country before his parents left to Canada following the Russian collapse and bankruptcy of the 90s.

The two met in June at the St Petersburg International Economic Forum, where Buterin for the first time wore a nice presentable looking bland plain white shirt.

And where he spoke in fluent Russian. So impressing Putin who undoubtedly might have wondered whether he was listening to this generation’s Tesla.

 

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