When it rains it pours, as the Russian government is set join the growing list of governments establishing regulatory sandboxes to facilitate the development of cutting-edge technologies like artificial intelligence and blockchain.
While the recently introduced Bill by Prime Minister Mikhail Mishustin does not directly mention blockchain or cryptocurrencies, it contains an explanatory note which details distributed ledger as one of the technologies that could be explored in the new “experimental regulatory regimes.”
The Bill proposes that live-tests of these technologies should be conducted within the industries of medicine, transportation, distant learning, financial markets, online commerce and other sectors.
The bill provides Russian regulators with a broader scope to deal with this technology more flexibly, suggesting that the country’s regions would be able to set up their own local sandboxes.
The Bank of Russia intends to supervise the sandboxes related to fintech, and Representatives of the Economic Development Ministry have stated that fintech projects operating within sandboxes would be subject to lighter regulation regarding cash reserves, financial reporting and foreign currency controls.
Olga Shepeleva, a senior expert at the Center for Strategic Research, explained that the length of time required in delivering a draft of the Bill was primarily due to concerns that such a law would excessively skew the power balance in favor of the executive branch.
She said:
The main idea is that the government can choose to make a temporary exceptions from laws and regulations.
The Bank of Russia has already been running a regulatory sandbox for fintech projects, having successfully reported testing of a blockchain-based tokenization pilot by the mining and smelting company Nornickel.
Shepeleva went on to say that:
The new bill will also allow the creation of sandboxes in which real businesses will be working with real customers.
Russia has consistently maintained a skeptical stance towards digital currencies in recent years, however this Bill, if approved, could be long-awaited turning point, signalling further significant developments to come.