Prioritizing the digital economy proposed by the new Russian Prime Minister

Russian media has announced that Russia’s new prime minister, Mikhail Mishustin, has called for the digital economy to be prioritized. Mishustin was confirmed on Thursday after former government and prime minister Dmitry Medvedev announced their resignation. The decision was made on the basis of amendments to the Russian Constitution proposed by President Vladimir Putin.

Mikhail Mishustin mentioned that his priorities will be the reform of institutions and the development of the digital economy. He said the country should implement modern information technologies, adding:

“The state should become a digital platform created for people.”

Previously, Mishustin was the head of the Russian Federal Tax Service.

Blockchain plays an important role for big Russian companies

Large Russian companies, including some where the state has a significant interest, are beginning to test and apply blockchain technology for different aspects of their operations.

In December 2019, Russia’s national energy network operator Rosetti began testing a blockchain solution for payments in the retail electricity sector. The company aims to automate and make transactions between producers, suppliers and consumers more transparent.

Last November, Russia’s largest bank, Sberbank, became a pioneer in blockchain solutions for repurchase agreements. The project uses smart contracts to automate repo transactions between the parties. The Russian state holds a majority stake in the Sberbank bank.

Some members of the crypto community believe that Russia plays an important role in the development of the blockchain industry. A significant percentage of blockchain developers and developers come from Russia. Also, last year, Binance exchange CEO Changpeng Zhao named Putin the most influential person in the blockchain industry.

Poor legislation and prioritization of the digital economy

Currently, Russia does not yet have a well-defined legal framework for cryptocurrencies and digital assets. In recent years there have been several attempts to create a legal definition of cryptocurrencies. Putin has twice requested the implementation of a legal framework for the industry so far. Similar remarks were made by the Supreme Court of Arbitration and the Financial Action Task Force (FATF).

Other institutions, such as the Central Bank of Russia, support the ban on the use of cryptocurrencies as a payment method.

A draft law on “Digital Financial Assets” was approved by the State Duma (Russian Parliament) in May 2018. Subsequently, the law was returned because it had significant shortcomings in the definition of terms. The project did not include definitions for cryptocurrencies, tokens and the mining industry.

In November 2019, the supervisory authorities began to consider options for creating a legal framework for cryptocurrency confiscation.