The international academic conference “Digital currency in the context of modern legal and economic challenges” has taken place at the residence of the State Duma in Moscow.

The event was organised under the auspices of the Duma’s interdepartmental task force on the cryptocurrencies risk evaluation. It gathered leading researchers, parliamentarians, fintech experts and industry players. The declared objectives of the conference were to assess the advantages and risks of cryptocurrencies and work out recommendations for the Duma to create a legislative framework for digital currencies implementation.

The draft resolution summarising the results of the discussion recommends the Parliament to “develop a single strategy for the circulation of digital currency”, “explore the proportion of advantages and risks of digital currency circulation” and to prepare analytics to be sent to the President and federal authorities.

The State Duma, Central Bank and relevant ministries are advised “to assess legal, organisational and financial capabilities for implementation of the blockchain technology in banking, insurance, social services and other spheres.”

Andrey Lugovoy, Deputy Chairman of the State Duma Committee on Security and Anti-Corruption, stated in an opening speech that Russia is now facing a choice concerning which way to go: prohibitive or permissive. He emphasised that the final decision should not be based on short-term political preferences but on a comprehensive study of the problem, where the help of the academic community is especially important. The MP firmly denounced “surrogate money” saying that they “shake the foundations of financial security and facilitate the flight of capital.” However, the principal question, according to Lugovoy, is whether cryptocurrencies should be considered “surrogate money” and how serious are the risks they pose.

“Could it happen that, by making cryptocurrency equal to surrogate money, we close opportunities and development prospects for financial technologies?”

However, an over-the-top laissez faire attitude, according to parliamentarians, would be a mistake either. Sergey Katasonov, Deputy Chairman of the State Duma Committee on Budget and Taxes, referring to the relaxed position of the Central Bank concerning cryptocurrencies, made a remark that commissioners were “unable to overplay the approach of the Central Bank which, becoming a mega-regulator, does not bear any real responsibility for the development of our economy.”

The first part of the conference was focused on defining the economic nature of cryptocurrencies. Academic experts from many Russian universities shared opinions whether cryptocurrency should be regarded as money, universal payment instrument, store of value or commodity.

A representative of the Russian Investigative Committee expressed concerns that uncontrollable use of bitcoin in Russia could lead to monetary inflation because illegal and uncovered money would merge with real one (ruble).

The second part of the event was mostly concentrated on the discussion of the blockchain technology. A research group from Crimean Federal University presented a project of blockchain integration into the public sector. It suggests using the technology for the benefit of the Federal Service for State Registration.

Overall, the event was attended by about 200 guests. The proceedings of the conference are scheduled for publication in September 2016.

Maria Rudina