The Russian Government Keeps Betting On Blockchain For Elections

Blockchain, News, Opinion | September 15, 2020 By:

Various states have different regulations with regards to bitcoin and blockchain in general. Some are relaxed, while others are strictly restricted. Thus the lawful status of bitcoin differs significantly and is as yet undefined. While bitcoin itself is not illegal in most nations, its status as money or an asset varies with the administrative regulations.  Although some countries have clearly allowed its use and trade, some have banned it or regulated its operations. Also, different government offices and courts have characterized bitcoins in various ways. While this article explains the use of blockchain in Russia, bitcoin is still largely prohibited in the country. 

Bitcoin got considered illegal Russia from November 2016 per the Federal Tax Service of Russia. In September 2017, Alexei Moiseev, the Deputy Finance Minister of the Russian Federation said that accepting payments in Bitcoin is illegal and the bitcoin market websites are blocked. 

The Russian Legislature currently sees cryptocurrency as a replacement for the standard currency, and according to Russian laws, this in itself is illegal. The Central Bank of Russia advised the Russian citizens to be careful with digital currency because it is very volatile and risky. In March 2018, a bill was passed on cryptocurrency resources that were presented in the State Duma. Which characterizes digital currency mining as an entrepreneurial activity and as such, is allowed, yet bitcoin and other cryptocurrencies are prohibited. Digital currency can be traded for rubles in Russia, however, only through state-authorized administration. 

Is cryptocurrency allowed in Russia?

Although the Russian government has gladly welcomed the blockchain innovation, the administration is still strongly against digital currencies due to the fact that its transactions operate on anonymity and many compliance risks are involved. For quite a while, Russian specialists have been concentrating on possible uses of blockchain innovation and digital currency. The attention has been on consistency, anti-corruption, and anti-money laundering measures. Presently, there is no law that defines cryptocurrency or allows it in the country. 

Blockchain is supposed to be without borders, however, it is in fact strictly limited to many regulations in various countries worldwide. Everything identified with cryptography in Russia falls under the management of the Federal Security Service. While there is no law legitimately expressing that blockchain organizations must be covered by the FSB, organizations are encouraged to do so. To start with, as per Russian law, documents signed electronically should use state-confirmed electronic stamps too for them to be binding. These processes create a lot of unique difficulties for blockchain. It is standard for blockchain innovation to have a transparent, and agile auditable framework. However, having certified cryptographic modules brings up issues about reliability and transparency.

Blockchain e-voting in Russia

Many people think that blockchain only operates for currencies, and this is widely not the case. Many countries are starting to use blockchain technology for elections. In Russia, the e-voting system is adopting the use of blockchain in its federal elections. Access to the program has been provided to the public by the country’s federal authorities. The announcement was made in September 2020 by the Central Election Commission of Russia on GitHub, who released the internal components of the e-voting forum, which is expected to have been published yesterday September 10. 

Russia is set to steer its blockchain-controlled democratic framework at the forthcoming elections for the State Duma, which is the lower house of Assembly in Russia. The election is planned for September 13, the elections were initially expected to happen no sooner than September 2021. The decisions, which additionally includes other government offices, happened not long after Russia guided its e-voting framework during a vote on amending the constitution in summer 2020. On July 4, the amendments permitted President Vladimir Putin to serve two more six-year terms. At the vote, the blockchain framework allegedly had several bugs and also significant data breaches.