A few weeks ago, Russian authorities have made an announcement that the use of Bitcoin was legitimate in the eyes of the law. With a growing population of an estimated of 146 million citizens, the country of Russia itself is an important market for Bitcoin as Cryptocurrencies are slowly being adopted around the world.
Russian lawmakers are currently working on the Civil Law amendments aimed at legalizing initial coin offering, also referred to ICO
Russian politician and the Presidential Commissioner for Entrepreneurs’ Rights Boris Titov has made a proposal that the country of Russia should consider legalizing Bitcoin and Cryptocurrencies similar to how developed countries like Japan, Singapore and US are regulating their FinTech Market
Mainly, regulating crypto usage will help the Russian Tech scene to raise capital much more safely compared to previous times while giving the country an early headstart when it comes to utilizing Blockchain Technology. With defined rules and processes for ICOs, the companies that do join will be protected from vexatious claims resulting from disgruntled investors, this allow’s Firms to register their Business with the Government, to further attract more Insistitual Clients who have little risk appetite for the current high-risk initial coin offers
Investors themselves will receive their own defined guidelines on their rights while Firms have to accept Government Intervention as they receive ”green light” for raising funds via an initial coin offering. Furthermore, the regulation could be a gateway to other rules, such as taxation to domestic adoption. Moreover, how the crypto space reacts to Government regulation will also be interesting to observe, particularly as more Fintech firms see ICOs as a golden route to funding developments
One of ICOs requirements is that investors are to use certain Cryptocurrencies that are accepted by Russian Authorities, this typically going to be Ether or Bitcoin. The legalisation of Cryptocurrency in Russia can help large companies and small businesses that need investors, to raise funds considering the fact that it’s Economy is deemed relatively cut of from Global Markets due to escalating tension and sanctions imposed as a result of Global politicals agendas, that makes it hard for investors to partake in the Russian Markets
The cryptocurrencies topic have frequently been popping up with the Russian media recently. During the month of June, President Vladimir Putin actually met up with Ethereum creator Vitalik Buteri, stirring up Media Buzz. “The conversation was held following the President’s meeting with heads of major foreign companies and business associations,” President Putin’s official website states, that “Mr. Buterin described the opportunities for using the technologies he developed in Russia.”
In the last few years, hundreds of new Tech Firms were capable of cumulatively raising billions of dollars by selling digital coins that function like Bitcoin in that they are traded over the Internet and investors initially have the opportunity to buy-in during ICO which has been compared to an IPO where Initial public offering or stock market launch is a type of public offering in which shares of a company usually are sold to institutional investors that in turn, sell to the general public, on a securities exchange, for the first time.
The growing adoption of Cryptocurrencies will allow FinTech companies to compete with Banks & Financial Institutions thus it was only a matter of time for the Russian Government to regulate the space, starting with ICO’s .
With so many scams existing in the Crypto-space this may be clear warning to developers to properly launch a proper ICO and manage their clients funds properly, but also made it more difficult for new tech start-ups due to Business Laws and Regulations making it important for small businesses to understand the various regulations governing commerce in their locale, which may include special licenses, permits, and other specific requirements