Russian Economy Ministry ‘Wants to Legalize Crypto’ in Sandboxes

Russia could be set to legalize cryptocurrencies for companies and investors operating in new, industry 4.0-friendly regulatory sandboxes.

Per news outlet Izvestia, the country’s Ministry of Economic Development wants to add a range of new provisos to sandbox-related legislation submitted last week to the State Duma, the country’s parliament.

The ministry wants to create a “satellite” bill of exemptions from existing regulations on data gathering, autonomous vehicles and cryptocurrency usage, as it fears that without these, blockchain and other industry 4.0 companies will not be able to test their products and services with sufficient freedom.

The ministry’s new proposals, says Izvestia, would allow companies that are given the green light to operate in the sandbox to “test blockchain technology and cryptocurrencies.”

They will also be exempted from mandatory requirements placed on financial institutions relating to the minimum size of capital holdings, the amount of funds they need to keep in reserve, and may even be able to avoid having to report their activities to the Central Bank.

The ministry has also suggested doing away with limits on borrowing risk.

However, one potential roadblock involves the afore-mentioned Central Bank. The ministry’s plans involve the Central Bank acting as a regulator within the sandboxes.

But the bank appears to be as crypto-skeptical as ever. In fact, it only recently spoke out about the possibility of outlawing crypto mining in the country, and returned to its pet subject – warning about the risks involved with dealing with cryptocurrencies.

And perhaps ominously, Izvestia says that the Central Bank did not respond to a request for comment on the ministry’s plans.

Another issue could be the outbreak of the coronavirus, which could potentially derail any such incentives – or at least see them put on the backburner.