The Economic Forum
Every summer, thousands flock to the Russia’s northern capital of Saint Petersburg to witness the famous ‘white nights.’ During this time, the city also hosts the annual conference dedicated to economic and business issues - the Saint Petersburg International Economic Forum (SPIEF).
Over 5,000 political and business leaders, leading scientists, public figures, and members of the media from all over the world coalesce in St. Petersburg under the auspices of the President of the Russian Federation to discuss the most pressing issues facing Russia and the world.
What Russian politicians think
Back in April at the Moscow Bitcoin Conference, the general consensus of Russia’s Bitcoin community on the topic of Russia’s purported ‘ban’ on Bitcoin was that it is in fact a hands-off approach with many questioning the feasibility of regulating the new market.
So when the participants were asked what they thought about Bitcoin and cryptocurrencies as a whole, the answers were not surprising and relatively uniform across the board. Indeed, the common trend among Russian officials was to distance themselves away from cryptocurrenices in light of the aforementioned statement from the central bank.
Sergey Belyakov, Deputy Minister of Economic Development of the Russian Federation, stated:
“I don’t use it. But I know that our regulatory bodies, as far as I can tell, are reasonably skeptical towards this new system of payment. But I am open to any new ideas related to payment system and I don’t think that the inability to control is a strong argument for shunning this new system.”
Listen to the full audio (in Russian) here: Sergey Belyakov @ SPIEF
When asked about the reason for the so-called ban on cryptocurrencies, which the Central Bank of Russia justified due to their potential involvement in financing illegal activities, Belyakov added:
“If there are particular issues with what kind of [illegal] transactions can be supported with such a payment system then this is a question of management, the effectiveness of control and the adaptation of regulatory bodies to emerging technologies. This has always been the case and you cannot stop the world from moving forward, new systems of payment included.”
When asked whether there will be a dialogue between the Ministry of Economic development, the central bank, Ministry of Finance and regulatory bodies to legalize crypto currencies such as Bitcoin in Russia, Belyakov said:
“I really have no idea. I think that a dialogue will occur since [cryptocurrencies] are spreading across the globe, actively in some places and not so actively in others.”
These sentiments on crypto currencies were reverberated by other government representatives. “Our federal budgeting strategy doesn't imply the existence of Bitcoin,” said Anton Siluanov, Acting Minister of Finance of the Russian Federation.
Listen to the full audio (in Russian) here: Anton Siluanov @ SPIEF
While Alexander Shohin from the United Russia Party stated:
“I really don’t know and I do not use these cryptocurrencies. I already mentioned that this is not my type of topic and crypto currencies is something that I don’t want to get involved in right now. Even our commission on banking has not addressed the issue. People of course know about [Bitcoin] but I cannot assess how widespread it is, who uses it and how many people. So I cannot say how relevant it is to regulate this market.”
Next, Arkady Dvorkovich, the ex-Assistant to the President of the Russian Federation under Dimitry Medvedev, asserted that the topic of Bitcoin was completely outside his area of expertise:
“This is a question for the Central Bank. But with relation to surrogates or cryptocurrencies and how they will influence the economic situation as a whole - the monetary policy is, after all, relatively delicate with inflation etc. You must approach these issues carefully.”
What Russian businesses think
On the business-side of things the situation was similar. “I don’t know what it is,” tersely said the CEO of MTS, Russia's biggest mobile network operator, Andrey Dubovskov.
When asked about the regulatory situation in Russia, the CEO of one of the leading banks in Russia, VTB, Yuri Soloviev, stated:
“It’s unregulated. I doubt that even 1% of people use it so its a non-issue right now. No idea.”
While some other more tech-savvy businesses showed a bit more knowledge on the matter. Alexandra Savina, Marketing Strategy Director from Ulmart, Russia’s leading online electronics retailer, stated:
“We studied the possibility of integrating this payment system since we strive to provide our customers with every possible means of payment…but as a law-abiding company we have left this issue alone for the meantime since certain restrictions exist on the governmental level.”
Nevertheless, Ulmart has shown interest in cryptocurrencies as they could certainly provide customers with yet another convenient way of buying electronics online. When asked if the company will continue to pursue the prospect of including Bitcoin as a form of payment in the future, Ulmart demonstrated that it was ahead of the curve:
“When they [cryptocurrencies] are legalized, we can integrate it into our system with the press of a button,” said Savina.
Listen to the full audio (in Russian) here: Alexandra Savina @ SPIEF
A haven for Bitcoin?
It seems that the majority of government representatives as well as some of the nation’s top CEOs are all on the same page. Of course, their views range from lukewarm and highly skeptical stance to a “time will tell” type of position, but the situation in Russia is certainly different on the ground when compared to the official statement released by the Russia’s central bank and the purported stance of the Russian government.
Thus, it seems that Russia’s Bitcoin community was certainly spot on in their view of the government’s regulation of Bitcoin i.e. there is none. What’s more is that some officials appear to intentionally bury their head in the sand and shrieking at the word - cryptocurrency - until a more conclusive announcement on nascent digital currency is issued by the Kremlin and the Central Bank.
Meanwhile, businesses such as Russia’s VTB bank and others who work closely with the government appear to be singing the same tune. While more tech-oriented businesses who can potentially reap benefits from implementing new payment system seem to be more open to the prospect as they look to receive some clear-cut guidance from the central government.
Given the lucrative opportunities presented by Bitcoin and cryptocurrencies in general along with the opaque regulatory situation in the country, all eyes will soon be on the Russian government and the Central Bank for official guidance on how to approach this new technology.
Until then, despite of what you may have heard from the media, Russia remains an unregulated ‘wild west’ with its current unofficial hands-off approach that might prove to be the perfect environment for Bitcoin and other cryptocurrencies to thrive in.