Putin Approves Cryptocurrency Bill, Stopping Russians From Using Bitcoin for Payments

On Friday, Vladimir Putin, Russia’s president, signed one of the two digital assets bills into law, Russian media outlet RIA reports.

The new law was passed by Russia’s parliament, Duma, last week and states that firms can provide virtual securities on blockchain platforms provided they are well registered with the country’s central bank, Bank of Russia, as issuers as well as meet various provisions.

The new law also states that decentralized cryptos are taken to be a form of property that should be declared by the holders for taxation purposes.

The bill notes that as a property, cryptocurrency cannot be used to pay for goods and services in the country. However, businesses accepting crypto payments have until January next year to adjust to the new development.

According to RIA, the bill seems like a mild version of what was essentially proposed. Russian parliamentarians had developed a new proposal of the bill which would render any entity providing or trading cryptocurrency illegal in the country.

The first draft of the bill highly represented the skeptical stance that has been advanced by the country’s central bank. It led to widespread condemnation from the crypto community as well as from the country’s Ministries of Economic Development and Justice.

The law also states that Russian residents will now have a chance to challenge any transaction involving the digital currencies in a court of law provided the plaintiff has proof of transaction and is a crypto holder.

The Russian parliament is currently working on a more comprehensive digital bill that will touch on various issues regarding digital currencies. The bill is expected to be discussed and passed before the end of the year. However, no specific details on dates have been disclosed to the public.

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Author: Joseph Kibe

Russia’s Supreme Court Employs Blockchain Technology To Vote Amidst the COVID-19 Pandemic

  • Russia’s Supreme Court uses blockchain technology to finalize voting decisions.
  • Polys, a blockchain based voting platform by Kaspersky Labs, enhances transparency and security in voting systems.

An official statement published on the official website of the Supreme Court of the Russian Federation, the Plenum of the court used Polys blockchain technology, developed by Kaspersky Lab, to vote in light of the current social distancing protocols in place due to the COVID-19 pandemic.

The Kaspersky- developed Polys blockchain is built on the Ethereum aiming to build completely secure and immutable online voting platforms to enhance transparency and accountability in elections.

The Supreme Court participants used Kaspersky Lab’s Polys blockchain to “make decisions” which were then “deployed on the basis of Softline’s Russian cloud storage.” The successful implementation of the blockchain solution pushed a recommendation on its use in the upcoming meeting in July. The statement reads,

“As a result, this system is recommended for use in the framework of the next plenary meeting of the Council of Judges of the Russian Federation, which will be held in July 2020. The meeting is supposed to include the maximum possible number of representatives of the Russian judicial system.”

Blockchain voting adoption in Russia

Russia is heavily focusing on blockchain voting systems in a bid to improve their elections – both at the state and national level. In 2019, the Moscow’s city parliament, known as Duma, successfully conducted a regional election while in December 2018 another regional election in Saratov Oblast, with over 40,000 participants, was conducted on a blockchain platform.

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Author: Lujan Odera

Russia to Leverage Bitfury’s Enterprise Blockchain Solution, Exonum, for Impending Referendum

  • Russian referendum elections to include Blockchain pilots in Russia’s capital and Nizhny Novgorod.
  • They will be supported by Bitfury’s enterprise Blockchain solution, Exonum.

News has emerged of Russia’s intent to leverage Blockchain tech for its upcoming referendum. They are to vote on whether the presidential term should be increased, allowing the president to serve for more than two, six-year terms. Initially, the referendum was originally set for April 22nd, however, it was pushed back to July 1st due to Coronavirus concerns.

Russia Launches Pilot Programs

They have established that Moscow and the Nizhny Novgorod regions as where the Blockchain pilot programs will be utilized. The dwellers of the two areas will be afforded the alternative of balloting electronically, unlike other areas that will have to make do with the legacy paper polling.

The Moscow’s Department of Information Technologies has highlighted on their official page that they will be designing the electronic election system. There is, however, mention of Kaspersky labs as the developer of the system.

This will be supported by Bitfury’s Enterprise Blockchain solution, Exonum. Operating on Proof of Authority concept, the smart contract for the ballot registry will be tasked with vote tallying and storage. Once voting is complete, tallied votes be deciphered, and results published.

Bitfury, through their spokesperson, was not keen to clarify their role in the project. They, however, highlighted that Blockchain-based voting was one of the main scopes of their enterprise Blockchain. Exonum was launched way back in 2017 as an open-source Blockchain solution. They, however, rolled out Exonum enterprise on December 5th last year. This new solution was tailor-made to suit the needs of corporations and governments due to its scalable nature, a feature not present on their open-source model. Just a few of the partnerships include; South Korean Hospitals, and Longenesis Blockchain Medical Data Marketplace.

Russia’s Love on Blockchain Voting

Notably, this not Russia’s first attempt at Blockchain polling.

On September 8th, 2019, residents of three districts in the Russian capital were extended the option of balloting electronically supported by Blockchain voting solution. They reported a 92.3% turnout translating to almost 10 396 Muscovites.

However, upon further inspection of the system by Pierrick Gaudry, a French cryptographist determined that the system was indeed vulnerable to hacking attacks. According to him, although the system was built on an almost impenetrable Ethereum Blockchain, the encryption system adopted by the creators of the program was flawed.

Experts Remain Skeptical on E-voting

Industry experts remain skeptical of the feasibility of electronic voting let alone a Blockchain-based solution. Blockchain researcher, Sergey Tikhomirov citing the Moscow elections was opined that with no technical method of viewing the data, the system was vulnerable to tampering by the administrators.

“Unlike with the paper ballots, in this case, the forgery leaves no trace,” Sergey Tikhmirov.

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Author: Lujan Odera

Russian Bank, Sberbank, Announces $100M Contract To Buy 5000 Blockchain-Enabled ATMs

Russia’s largest bank, Sberbank announced a $100 million deal to set up nearly five thousand blockchain-enabled ATMs across the country.

The initiative is aiming at reducing the contact with bank cards and cash through integration with Apple Pay, Samsung Pay, Google Pay, Huawei Pay and Mir Pay. However, the partnership will not include any crypto payments on the platform.

A local Russian news release, Izvestia, confirmed Sberbank’s launch of over 5000 automated teller machines (ATMs) across the country. The measures employed by the blockchain-friendly bank are expected to combat the spread of the current CoronaVirus pandemic.

The machines are expected to hold at least $14,500 USD with enhanced blockchain capabilities, vandalism resistant manufacturing and employ video cards for facial recognition. As per the report, the bank forked out a total of $108 million on the project to reduce the contact on the screen on the ATMs by allowing users to directly connect through their smartphones.

The bank is on the forefront in adoption of blockchain technology in the Russian financial industry but has strongly opposed any implementation of cryptocurrencies into their own systems.

In November 2019, Sberbank became the first bank to be awarded a distributed ledger technology (DLT) patent for an operational engine using DLT and a Repurchase Agreement (repo) dealing with a smart contract solution.

Russia’s Involvement in Blockchain and Crypto

The government-affiliated bank is heavily invested in blockchain. Having collaborated with the government and the Russian Economic Ministry in setting plans to open regulatory sandboxes for blockchain developments in the country.

The proposed project, if implemented, is expected to open up experimental testing in the driverless automobile industry, use of data without prior consent as well as diagnostics.

However, the government aims to toughen its laws surrounding any activity in the cryptocurrency industry including trading, investing, buying and selling of digital assets within the country. Earlier this week, Russian lawmakers proposed a draconian bill that fines any ownership and usage of crypto at up to 1 million for individuals or 2 million for businesses or seven years jail time.

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Author: Lujan Odera

Russian Govt Looks To Block Censorship-Resistant Tech; IoT, TOR, and Telegram’s TON

Russia’s communications regulator, Roskomnadzor, is looking for contractors who can block networks that are resistant to censorship. According to a publication by General Radio Frequency Center on March 3, the communications watchdog is seeking technical solutions to get rid of unwanted platforms that often host extreme content.

Some of the platforms that have been officially identified as darknet threats in Russia include Zeronet, Freenet, Invisible Internet Project and Telegram’s Open Network (TON). The latter however popular for its social media network was not spared by Roskomnadzor.

How is Telegram’s Network a Threat?

Telegram featured in this list owing to its upcoming blockchain platform; the firm had planned to launch it soon but encountered some challenges with the SEC. Despite the shortcomings, the social network is determined to launch TON with the latest development update being a guide on how to leverage TON’s DNS for websites.

The TON network is designed to offer a number of services including anonymity hence the friction with Russia’s communications agency. It is also not the first time Telegram is facing a hostile ecosystem; back in 2017 Roskomnadzor tried to block Telegram’s messenger. The agency has however been unsuccessful to date given Telegram’s domain fronting technique.

Following the March 3 publication, Roskomnadzor has moved to block six crypto-oriented websites without any warning to users. The platforms that have suffered this wrath are; prostocoin.com, tittok.com, btcphone.ru, nicechange.org, alphatop.me, and bits.media.

Telegrams CTO, Mitja Goroshevsky, is however optimistic that TON cannot be blocked by Russia’s authorities;

“Even if there is an ‘Iron Curtain’ and all the communication channels with the outside world are blocked, chances to block it are around 5 percent,” adding that “it will be a new disgrace for Roskomnadzor”

Mitja also highlighted that the only way to tamper with TON’s network is by compromising over 30% of validators within its ecosystem. According to him, this would be a far-fetched ambition as most of the validators are based outside Russia in order to leverage the cloud services by Amazon and Google.

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Author: Edwin Munyui