Despite the nature of the decentralization of cryptocurrencies, many will try to centralize them. Some governments will still try to poke their nose on the ecosystem and try to impose regulations.
The Russian government has given its government officials an ultimatum to dispose of any digital asset they own by April 1.
The Ministry of Labor just communicated that officials of both the federal and local government are prohibited from ownership of any digital assets and must dispose of what they have. The directive is limited to the government officials and Bank of Russia board members, chairs of any government-owned corporations, and their respective families. They are also not allowed to own cryptocurrencies even when they are out of the country.
The Ministry of Labor published on December 16, 2020, its main aim is to lower the corruption levels.
The law officially became valid in January. The new law also included amendments done to other Russian laws that prohibit any Russian government official from buying financial instruments from foreign countries or opening accounts in foreign banks. The law defined cryptocurrencies as digital assets issued in line with foreign law. It acknowledges crypto assets as property but prohibits their use as a means of payment.
Although the new law looks stringent, it is not that strict on disclosure yet. During the first year of the implementation of the law, public officials are not obliged to declare the digital assets they own and their properties. They do not have to make any anti-corruption declarations for 2020.
Since the crypto space is somewhat complicated, it will be hard to track down how many government officials own cryptocurrencies as there are also no public reports on the matter.
Insecurities in Governments
Most government’s main concern with cryptos is that they believe it promotes money laundering. Apart from Russia, some governments are still battling on ways to govern cryptos activities.
Even though governments such as Russia are ambitious in their measures, it will be hard to control the situation as cryptos in nature are completely anonymous. It will be hard to track the exact crypto assets owned by different people despite KYC measures.
Many platforms with customer details have a privacy agreement unless the different crypto projects decide to list the members involved.
The trends of insecurities brought about by crypto will become lenient with time. With the KYC measures in place, crypto cybercrimes will be on the decline. With time, there will be more solutions to the issues facing crypto and its use in illegal activities.
One of the significant reasons governments have an issue with cryptos is that they do not clearly understand how the process or cryptos work. With more knowledge, the situation will likely change.
Just because Russia has banned its officials from holding crypto does not mean it is anti-crypto. When the Russian Opposition leader was jailed, many people opted to donate through BTC (Bitcoin) that pushed the amount to 3.7 BTC, which is a tidy sum.
When it comes to crypto exchanges, a Russian court opted to take Binance off the blacklist to operate freely in the country.
There is also Gazpromneft, a subsidiary of a Russian oil drilling giant that opened a crypto mining farm in the country that runs on gas energy.