Putin formally approves new cryptocurrency regulations, intends to apply IPO regulatory rules to ICOs

Beijing time, October 25th, Russian President Vladimir Putin has approved new regulatory provisions on cryptocurrencies, including registration requirements for miners and securities laws applicable to ICOs.

The Kremlin released five orders from Putin over the weekend, perhaps representing the most explicit regulation of digital currencies by the Russian government to date. Putin’s orders not only approved a new legal structure for cryptocurrency activities within Russia, but also ambitiously laid out a plan to use the technology to create a “single payment space” within the Eurasian Economic Union, whose member states include Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

Notably, Russia intends to apply IPO regulations to ICO applications, which sell crypto tokens to bootstrap a new blockchain network. Putin also ordered the Russian government, led by Prime Minister Dmitry Medvedev, to develop a registration system for cryptocurrency miners and make them pay income tax.

One of the decrees appears to be based on existing regulatory efforts by Russia’s national legislature, the State Duma, and the Central Bank of Russia targeting cryptocurrency activities.

It mentioned:

“The Government of the Russian Federation, jointly with the Central Bank of Russia, shall ensure that the legislation of the Russian Federation is amended to determine the status of digital technologies applied in the financial sector and their concepts, including ‘distributed registry technologies’, ‘digital credit certificates’, ‘digital mortgage certificates’, ‘cryptocurrencies’, ‘tokens’, ‘smart contracts’, and that the ruble is the sole legal tender in the Russian Federation.”

At the same time, the Russian government also hopes that startups can develop new financial services around these technologies.

One of the decrees requires the establishment of a so-called regulatory "sandbox," or a framework that allows companies to test products in a limited environment. Some countries, including the United Kingdom, have established financial-oriented regulatory sandboxes that have attracted a number of blockchain-focused startups.