Putin: Russia Should Explore Blockchain to Avoid Finance 'Limitations'

Asked if Russia will have its own cryptocurrency one day, Putin said he doesn't see such an outcome as possible because cryptocurrencies "By definition are beyond the national borders."

Among the possible uses, he said, was to "Avoid various limitations in global finance trade" - a suggestion that blockchain could help ease sanctions against Russian banks, companies and individuals imposed in recent years.

Putin also noted during the four-hour annual session that cryptocurrency mining - the energy-intensive process by which new transactions are added to a blockchain, with new coins being "Minted" in the process - is not regulated, and similarly, cryptocurrencies are not recognized as legal tender within Russia.

Three bills regarding blockchain and crypto have been introduced in the Russian parliament, the State Duma, to date.

Both bills aim to introduce basic blockchain terminology to the Russian legal language, such as tokens and blockchain.

Michael Komin, an expert for the institutions development with the Center for Strategic Development - a Moscow think tank chaired by Alexei Kudrin, a former head of the Department of Finance and one of the proponents of blockchain technology in Russian establishment- believes that the bills are "Half-empty" because an adequate legal language for blockchain hasn't been created so far.

"The only thing the parliament can do is to ban the technology as such, but it won't be approved by the Bank of Russia, Department of Finance and Treasury, which are already using elements of blockchain, and by the President Putin's advisor Andrei Belousov," Komin said.

He expects the current blockchain bills to get "Left without movement until better times and finally perish under the piles of other bills."

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