Russian Prime Minister: Crypto is Still 'Interesting' Despite Sharp Decline in Prices

Russian Federation prime minister, Dmitry Medvedev recently said that cryptocurrencies are still “interesting” and that their declining prices is “not a reason” to stop following the ongoing development of blockchain-based digital assets.

Medvedev’s comments came during a speech he delivered at the Gaidar Forum, a major economic discussion event held in Russia. The former Russian president and Leningrad State University graduate remarked (roughly translated from Russian):

I’ll remind you that at our last meeting here, at the Gaidar Forum, we also talked about how good and interesting this all is, and so, since then, the cost of some cryptocurrencies, as we know, has fallen five times. But this, certainly not a reason to bury them.

Russia's Crypto Draft Bill To Be Introduced Next Month

Acknowledging the “exceptional volatility” of cryptoassets and the large number of scams associated with them, Medvedev said: 

Here, as was justly said, there are both light sides and dark sides, as in any social phenomenon, in any economic institution. And we should just carefully watch what happens to them.

On Monday (January 14th), local news outlets revealed that the lower chamber of the Russian parliament, referred to as the State Duma, would propose a draft bill (next month) on digital currency regulation. According to an official statement from Anatoly Aksakov, the head of Russia’s committee on financial markets, the nation’s new crypto regulatory framework will provide guidelines for initial coin offerings (ICOs) or other crypto-related crowdfunding methods and digital asset investment schemes.

Also on Monday, the Telegraph had incorrectly reported that Russia was planning to invest in bitcoin (BTC) in an effort to “replace the USD as a reserve currency.” As The Independent confirmed in January last year, there may have been members of the Russian government that had been discussing the development of a national cryptocurrency in order to bypass US-led economic sanctions.

Vladislav Ginko, a prominent economist at the Russia’s presidential academy of national economy and public administration, had said he believes: “the real factor of Bitcoin adoption will be when Russian government I'm working for will start investing almost $470 billion reserves into Bitcoins. I expect that it'll be at least $10 billion in the first quarter of this year.”

Centralized Governments Might Be More Interested In Privately-Managed Digital Currencies

As mentioned, Ginko’s statements regarding the Russian government’s interest in bitcoin investments was either misunderstood, taken out of context, and/or incorrectly reported by several major news outlets. Although Russian leaders and the nation’s residents are curious about cryptocurrencies and want to learn more about them, it might not make sense for centralized governments, including that or Russia, to invest large amounts of funds in decentralized digital currencies.

However, the Russian government might still be considering the possibility of introducing the CryptoRouble, which is a privately-managed and state-controlled digital currency. Last year, the Financial Times reported that one of Russian president Vladimir Putin’s economic advisors, Sergei Glazev, had said: 

This instrument [CryptoRouble] suits us very well for sensitive activity on behalf of the state. We can settle accounts with our counterparties all over the world with no regard for sanctions.