The President of the Russian Federation, Vladimir Putin, held a meeting on Tuesday to discuss cryptocurrencies. It was attended by top regulators including the central bank governor, her deputy, and the finance minister. While Putin acknowledged the risks associated with cryptocurrencies, he stressed the importance to not “build up unnecessary barriers” for new technologies.
Russia’s president Vladimir Putin held a meeting “on the use of digital technology in finance and the implementation of innovative financial tools” on Tuesday, according to the Kremlin’s website. The meeting was attended by Presidential Aide Andrei Belousov, Finance Minister Anton Siluanov, Central Bank Governor Elvira Nabiullina, Central Bank Deputy Governor Olga Skorobogatova and Qiwi CEO Sergei Solonin.
Putin’s meeting on using digital technology in finance on Tuesday. Anton Siluanov and Olga Skorobogatova at the meeting.
“Today, I propose addressing a topic that is relevant not only for our country, not only for Russia, but is probably becoming relevant also for the rest of the world,” Putin addressed his colleagues. “I am referring to introducing digital technology in the financial, banking sphere, and using innovative financial instruments.”
The head of state suggested that they discussed the use of cryptocurrencies, “taking into account all the various components of the problem,” Tass summarized.
Putin on Cryptocurrencies, Outlining Risks
Before the meeting started, the president of Russia gave a brief introduction on cryptocurrencies. “As is known, virtual currencies, also known as cryptocurrencies, are becoming or have already become very popular,” he began. “In certain countries, they are becoming or have already become legal tender, as well as an investment asset,” Putin continued, adding that:
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.
He then pointed out some risks associated with using cryptocurrencies, stating that “the use of cryptocurrencies also carries serious risks. I know the central bank’s position; I have discussed this topic with the Governor on several occasions.” He elaborated:
First and foremost, this is an opportunity for laundering illegal gains, tax evasion and even financing of terrorism, not to mention the proliferation of scams to which ordinary people can fall victim. Cryptocurrencies are issued by an unrestricted circle of anonymous entities. Therefore, buyers of cryptocurrencies may be involved in illegal activity.
Furthermore, Putin emphasized the lack of security for cryptocurrencies. “If the system breaks down or, as it is trendy to say today, if there is a bubble, there will be no entity legally responsible for that. This is a serious matter that we should bear in mind when discussing this topic,” he described.
Do Not Create ‘Unnecessary Barriers’
After outlining the risks he associated with cryptocurrencies, Putin went on to emphasize the need for regulations.
Citing how many countries are already working on creating legislative framework for digital currencies, he asserted that “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.” To that end, he emphasized:
It is important not to create unnecessary barriers, of course, but rather to provide essential conditions for advancing and upgrading the national financial system.
In June, Putin met with Ethereum founder Vitalik Buterin and briefly discussed the possibility of using Ethereum within the Russian government. The Russian President has been a proponent of new technologies. According to First Deputy Prime Minister Igor Shuvalov, Putin understands that hi-tech and the digital economy spur growth rates, adding that “it is not an overstatement to say that the president is passionately fond of it.”
What do you think of Putin’s suggestions to the regulators? Do you think the central bank will still create barriers to cryptocurrencies? Let us know in the comments section below.
Images courtesy of Shutterstock and Kremlin’s website.