Putin Wants to Create More Legislation for Cryptocurrencies

Putin Thinks Crypto Requires More Regulations

Russia’s president, Vladimir Putin, has stated that the country’s crypto-market will require a proper regulatory framework if it is to survive. The country will also consider legalizing crypto-trading based on votes. Putin and the Russian government, like most other governments around the world, believe that cryptocurrencies and their underlying technology, the blockchain, are definitely worth studying. As, Core Media has already reported, Russia and a number of other countries are looking into developing their own state-backed cryptocurrencies.

Crypto Not “Backed” By Anything

TASS, a Russian news agency, reported on January 11th that the country’s central bank “has sufficient authority” at the moment, according to Putin. However, the Russian president has also said that the country’s crypto-market might eventually require oversight legislation. He also noted that cryptocurrencies should not be looked at as a store of value. He stated:

“It is known that the cryptocurrency is not backed by anything. It cannot be a store of value. No material valuables are behind it and it is not secured by anything. It can be a settlement medium to a certain degree and in certain situations. This is done quickly and efficiently”.

Crypto Could Lead to a Paradigm Shift

Even Alan Greenspan, former chairman of the US Federal Reserve, has said that he fails to understand what is backing bitcoin and other cryptos. This has been a popular topic of discussion and debate among Reddit users. If you go through the threads, some people claim that even fiat currencies and gold are backed by faith; and, so is bitcoin. Then, other people discredit this claim and point to the fact that something need not have a physical existence to be real. However, what we could be looking at here is a paradigm shift that could change everyone’s perception of what money is. However, this is dependent on if bitcoin and other cryptocurrencies prevail.

Comparisons to Shared-Equity Construction

Putin has compared cryptocurrencies to a controversial housing/real estate scheme called shared-equity construction. The scheme deals with people attempting to sell property at various points in the construction process. He might be comparing apples to oranges here, but he stressed that the country cannot afford to get entangled into similar situations in the future.

Although his thought process and line of reasoning might be unclear or questionable, he thinks that the state will have to deal with the consequences if cryptos are not properly regulated. He might have a point here in some cases, like if it’s crime-related. However, it’s hard to buy this argument if he is claiming that the state will have to assist people if they incur financial losses. Already, billions of dollars have been lost or stolen over the years by people and organizations in the crypto-world due to a multitude of reasons.

Mixed Signals

It seems that the Russian government might want to slow down a little when it comes to deciding how it responds to the crypto-market. Not too long ago, news had been circulating about Russia developing its own cryptocurrency, the CryptoRuble.

While the latest reports about the CryptoRuble might just be updates, the Russian government keeps changing its position on crypto all too quickly. Russia is not alone when it comes to countries being fickle. The South Korean government has become notorious for trying to put different types of bans on crypto-related activity.