Russia Prepares to Test Cryptocurrencies in Four of Its Regions

The Russian Federation, which is yet to regulate digital assets, is now planning to allow four of its regions to test innovations that are not covered by its current legislation. A bill drafted by the Economy ministry envisages the establishment of regulatory sandboxes there. The special economic zones will allow companies, entrepreneurs and authorities to experiment with cryptocurrencies without breaking the federal law.

Regions to Become Test Grounds for Crypto Projects
The draft has been designed to facilitate the development of neuro- and quantum technologies, artificial intelligence, robotics, virtual and augmented reality as well as crypto and blockchain technologies. Companies are often unable to introduce these innovations to the market due to the absence of a relevant legal framework governing their implementation.

The plan is to launch projects in all of these fields within regulatory sandboxes that will be created in the capital Moscow and the regions of Perm Krai, Kaluga Oblast, and Kaliningrad Oblast, Izvestia reported quoting Savva Shipov, Russia’s deputy minister of economic development. Shipov told the business daily that the main goal is to stimulate innovations with regulations that will be more flexible than those that exist on the federal level.

Russia Prepares to Test Cryptocurrencies in Four of Its Regions

The Russian Federation, which is yet to regulate digital assets, is now planning to allow four of its regions to test innovations that are not covered by its current legislation. A bill drafted by the Economy ministry envisages the establishment of regulatory sandboxes there. The special economic zones will allow companies, entrepreneurs and authorities to experiment with cryptocurrencies without breaking the federal law.

Also read: Russia Adopts Law to Isolate Runet From the Internet

Regions to Become Test Grounds for Crypto Projects
The draft has been designed to facilitate the development of neuro- and quantum technologies, artificial intelligence, robotics, virtual and augmented reality as well as crypto and blockchain technologies. Companies are often unable to introduce these innovations to the market due to the absence of a relevant legal framework governing their implementation.

The plan is to launch projects in all of these fields within regulatory sandboxes that will be created in the capital Moscow and the regions of Perm Krai, Kaluga Oblast, and Kaliningrad Oblast, Izvestia reported quoting Savva Shipov, Russia’s deputy minister of economic development. Shipov told the business daily that the main goal is to stimulate innovations with regulations that will be more flexible than those that exist on the federal level.

Russia Prepares to Test Cryptocurrencies in Four of Its Regions

The authors of the bill point out that similar regulatory mechanisms are already being put in place elsewhere around the world, especially in regards to the financial services sector. This type of arrangements limit the legal risks for businesses and decrease the time and capital needed to develop and introduce innovative products and services.

According to Kirill Kabanov, advisor to the Russian president on the civil society development and human rights, existing laws often do not correspond to economic realities. “For example, for many years cryptocurrencies are actively circulating around the world, but in fact, most countries, including Russia, do not regulate their use,” he noted. “Regulatory sandboxes will be effective if they are used as test grounds for norms that can later be applied to adapt the legal environment to the new technological structure,” Kabanov added.

In fact, President Putin himself ordered Russian deputies to adopt laws and regulations pertaining to the digital economy during the spring parliamentary session, no later than July 1. A package of bills regulating digital financial assets and related matters was introduced in the State Duma last May but the final voting has been postponed multiple times. Even after their adoption, it’s likely that decentralized cryptocurrencies will not be allowed to circulate freely in Russia where money surrogates are banned and the ruble is the only legal tender. That makes the idea of creating regulatory sandboxes permitting these assets and technologies even more appealing.