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At the end of 12th century, unexpectedly, Genghis Khan created the world's largest empire, taking control of the trade route "the Silk Road" that extended across China to Europe from # 39; Is. Secured under the Mongolian leadership, during the Pax Mongolica period, the Silk Road was particularly safe from looters and taxes, which stimulated free trade between China and the Mediterranean countries for political and economic stability .

Pax Crypto

Recently, Russian President Vladimir Putin proposed a larger-scale initiative than Pax Mongolica after consulting Vitalik Buterin, co-founder of Ethereum, and experts of fifteen Other countries – including the United States, India, Israel, and Armenia and Turkey – about their Blockchain and Cryptocurrency initiatives. Putin's first cyberinitiative will link some of the most promising emerging economies in Asia, Eastern Europe, Africa and South America via Blockchain and Smart Contracts technology using a new multinational cryptocurrency that will be adopted collectively by the BRICS. the countries of the Eurasian Economic Union (Member States)

Member States, known for their tremendous potential for economic growth, could welcome this first initiative of its kind. As they were shaken by the global credit crisis of 2007/2008, which hampered their economies. The increase in federal rates has increased their growing debt burden and the fall in world commodity prices has thwarted their export-led growth. The cyberinitiative could redefine the economies of the Member States by stimulating technological innovation for income growth and economic prosperity.

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Russian Proposal – First Multinational Cryptocurrency for BRICS and EEU

As reported by Russian media source RT, days before the end of 2017, the Central Bank of Russia has proposed to create the first multinational cryptocurrency for the BRICS and EEU countries. By jointly adopting new cryptocurrency, member states could increase their investment in Blockchain, a smart contract technology to create cashless companies and improve liquidity management with substantial support from the New Development Bank.

and traditional financial institutions sought to downplay the influence of cryptocurrencies in the global economy, such as the German insurance giant Allianz, chief economic advisor, Mohamed El- Erian, who said: "The price of Bitcoin will explode, but the massive adoption will not happen"

But if it was adopted and implemented, the first multinational cryptocurrency could be used by more than 41% of the world's population It could potentially improve trade efficiency between Member States by replacing other fiduciary currencies used in trade regulations and this could create a technologically ingenious who could reshape world trade via Blockchain and technology of intelligent contracts.

However, for this initiative to succeed, the legislation tran Member States regarding cryptocurrencies should be updated in a synchronized manner. As summarized in the table below, there are important differences between the laws of the Member States concerning cryptocurrencies:

The new Russian cryptocurrency project

Based on the instructions of the President Vladimir Putin has prepared a draft law on the regulation of cryptocurrencies and ICO that was submitted to the Duma for approval on December 28, 2017. The bill is expected to be adopted in March and finalized by July 1, 2018.

cryptocurrencies

The bill characterizes cryptocurrency, including non-legal ICO tokens but as "other property".

ICO Regulation

The bill authorizes the ICO but imposes restrictions. Those who are not qualified investors will be able to buy tokens of some type for an amount not exceeding 50 thousand rubles ($ 869). The ministry also suggests limiting the maximum amount of funds raised by an international organization to one billion rubles ($ 17.4 million). Although the president of the Russian Association of Cryptocurrency and Blockchain (RABIC), Yuri Pripachkin, said: "The fundraising of the OIC should not be limited since they can attract an unlimited number of foreign investments in Russian projects. "

cryptocurrencies, mining and trading

Currently, mining and trading of cryptocurrencies is not regulated by Russian laws. The bill defines the mining and trading of cryptocurrency as a taxable activity. Individual entrepreneurs and legal persons could engage in cryptocurrency mining and trading activities, subject to taxation by analogy with the taxation of commercial activities.

Cryptocurrency transactions would not be subject to a value-added tax. ]

Member States' cross-border tax policy regarding the new multinational cryptocurrency

The draft law does not deal with cross-border tax rules that could apply to transnational cryptocurrency transactions between Member States. case of new multinational cryptocurrency

The Member States, with the exception of Armenia, Byelorussia, Iran and Kyrgyzstan adhere to the plan. BEPS action of the OECD. It is not clear whether Member States will follow a similar approach to that of the EU in formulating an appropriate cross-border tax policy for their new multinational transactions in bank money.

Disclaimer. The opinions and interpretations in this article are those of the author and do not necessarily represent the views of Cointelegraph.

Selva Ozelli, Esq., CPA is an international tax attorney and CPA who writes frequently on tax, legal, and accounting matters for TaxNotes, Bloomberg BNA, D & # 39; other publications and the OECD.