India Approves MOU on Joint Blockchain Research with BRICS Members

The Indian government has approved an MOU on the joint research of blockchain technology application under the BRICS Interbank Cooperation Mechanism.

The Union Cabinet of India has approved a Memorandum of Understanding (MoU) on the collaborative research of distributed ledger technology (DLT), local news outlet ANI reported September 12. The Union Cabinet is the supreme decision-making body in India consisting of cabinet ministers and led by the prime minister, Narendra Modi.

The MOU, which is a cooperative initiative under the BRICS Interbank Cooperation Mechanism, aims to foster better understanding of DLT and define areas where the technology can be deployed to improve operational efficiency.

The research will be jointly conducted by the Export-Import Bank of India (Exim Bank) and banks from the other BRICS member states; Banco Nacional de Desenvolvimento Economico e Social (BNDES, Brazil), China Development Bank (CDB), State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank, Russia), and the Development Bank of Southern Africa (DBSA).

The MoU was initially proposed at the 10th International BRICS Summit held in Johannesburg in July, the main focus of which was cooperation in economic development “in the face of the fourth industrial revolution.” The banks then agreed to jointly study DLT “in the interests of the development of the digital economy.” Mikhail Poluboyarinov, First Deputy Chairman and a Member of the Board at Vnesheconombank, said of the MoU:

“The current agreement allows the development banks of BRICS countries to study the applications of innovative technologies in infrastructure finance and bank products optimization.”

That month, the Indian state of Telangana also signed MoUs with blockchain companies to eventually implement the technology in state applications in order to streamline government services. The measure reportedly aims to bring more transparency and efficiency to public services provided by the state.

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Russian Central Bank Reportedly Conducted ‘Successful’ ICO Trial

A Russian Central Bank representative during a forum has announced that the bank has “successfully” conducted an experimental ICO.

An official from Russia’s central bank has revealed that the bank has recently conducted a “successful” experimental Initial Coin Offering (ICO), as cited by local news agency TASS Tuesday, September 11.

Ivan Semagin, deputy director of the Financial Market Development Department for the Bank of Russia, told TASS:

“Within a framework of the central bank’s sandbox, we conducted an experimental ICO on the basis of our existing infrastructure. Technically it was a success, but we still have a lot of legal issues”.

TASS writes that Sberbank and the National Settlement Depository were set to test an experimental ICO, issued by the Moscow-based commercial hall firm LevelOne, at the end of the summer.

Semagin made the announcement of the “successful” trial during in the Eastern Economic Forum (EEF), an annual event dedicated to the interaction and partnership between the Russian Far East and the Asia-Pacific Region, participating in “The Far East as a Financial and Offshore Centre” discussion.

Both Russian and Chinese officials and journalists attended the forum. During a discussion centered around crypto and ICOs, Alexey Chekunkov, CEO of the Far East and Baikal Region Development Fund, also noted that an ICO is a “useful technology” that might bring a good deal of money to the state.

He used Singapore and the U.S. as examples of a reasonable approach to crypto regulation, also adding that he remained quite sceptical about Bitcoin (BTC), calling it a “harmful pyramid scheme that wastes a lot of electricity in vain.”

The largest Russian bank, Sberbank, was reportedly the first in the country to test crypto-related technologies earlier this year. As Cointelegraph reported this January, Sberbank announced that it was opening a crypto exchange option for institutional investors via its Swiss branch.

According to TASS, Russia then officially launched a regulatory platform for new digital financial services and technologies that require changes in regulation in April. The Bank of Russia, along with state bodies and other institutions, then evaluates the pilot services and technologies participating in the platform.

However, some top Russian officials remain sceptical about cryptocurrencies, ICOs, and blockchain.

As Cointelegraph reported earlier in September, the president’s special representative on digital and technological development, Dmitry Peskov, said that the country is not yet ready for the circulation and issuance of cryptocurrencies. As well, President Vladimir Putin himself has said that Russia cannot have its own cryptocurrency, as cryptocurrency “by definition” cannot be controlled by a centralized entity.

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Iran and Russia Discuss Transacting in Crypto to Avoid International Sanctions

Both Iran and Russia are reportedly looking into using cryptocurrency as a way around Western sanctions

Iran and Russia could start using cryptocurrencies to avoid Western sanctions, Russian news portal RBC reported yesterday, May 17.

Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, referred to cryptocurrencies as a promising way for both countries to avoid US dollar transactions, as well as a possible replacement of the SWIFT interbank payment system.

At a meeting with Dmitry Mezentsev, the Chair of the Federation Council Committee on Economic Policy, Pourebrahimi said that they have “engaged the Central Bank of Iran to start developing proposals for the use of cryptocurrency.”

Pourebrahimi added that he discussed this topic in the State Duma’s Committee on Economic Policy the day before and that Iran had established cooperation with Russia on this issue:

“They [Russia] share our opinion. We said that if we manage to move this work forward, then we will be the first countries that use cryptocurrency in the exchange of goods.”

In turn, Mezentsev noted that “interbank relations between our countries should be of great importance” against the backdrop of international sanctions currently in place against both Russia and Iran. The meeting of the interbank working group on financial and interbank cooperation will be held in Tehran on July 5 of this year, RBC reports.

Last week, Pourebrahimi had reported that without access to the international banking system, Iranian citizens have so far succeeded in siphoning a staggering $2.5 bln out of the country in crypto.

Venezuela, another country facing international sanctions, recently released its own oil-backed cryptocurrency, the Petro, in a move that some critics saw as an illegal way to enter the international financial markets. After the Petro’s launch, both Turkey and Iran had expressed interest in releasing their own state-backed cryptocurrencies as well, with Russia’s own CryptoRuble reportedly set to launch in mid-2019.

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Venezuela Leverages Russian Bank Stake To Bypass US Petro Sanctions

Venezuela is taking advantage of its 49% stake in a Russian bank, and using it to skirt US sanctions on its cryptocurrency Petro, according to reports. Buy Petro For €1k At Moscow Bank As the Associated Press (AP) reported May 14, Evrofinance Mosnarbank has become the only international partner willing to accept investments for purchasing Petro, which allegedly raised $5 billion during its ICO. The move reflects the continued involvement on Russia in the story

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Russia’s Digital Economy Bill Supported by State Duma Committee in Move Towards Crypto Regulation

The State Duma’s Committee for Legislative Work will support a digital economy initiative that will “minimize” the risks of citizens using digital assets.

Russian State Duma’s Committee for Legislative Work will support the first reading of an initiative that will add the basic norms of digital economy to the Russian Federation Civil Code.  This is the latest step on the road to regulating cryptocurrency in the country, local news outlet Izvestia reports Wednesday, May 16.

Pavel Krasheninnikov of political party United Russia and head of the Legislative Work committee, told Izvestia that the initiative aims to “minimize the existing risks of using digital objects for transferring assets into an unregulated digital environment for legalization of criminal incomes, bankruptcy fraud or for sponsoring terrorist groups.”

The initiative, which is scheduled to be considered next week, does not mean that digital currencies will now become a legitimate means of payment. Instead, a separate law developed by the Central Bank, the Ministry of Finance, and the Ministry of Economic Development will set conditions for digital currencies to be used as payment “in controlled quantities.” The initiative does assert that digital confirmation by a user in a smart contract is equal to his written consent.

Russia first prepared a bill “On Digital Financial Assets” in March of this year, which would provide federal laws governing cryptocurrencies and Initial Coin Offerings (ICO) inspired by President Vladimir Putin’s decision to begin crypto regulation on July 1.

The March 20 draft defines crypto and digital tokens are assets only to be traded on authorized exchanges, also requiring user account at crypto exchanges to comply with AML and counter terrorism financing regulations. A review draft of the bill from mid-April added that the exchange of crypto for fiat above around $9,600 will be subject to mandatory currency exchange regulation.

Igor Sudets, the director of the program “Blockchain for Lawyers” at the Plekhanov Russian University of Economics in Moscow, told Izvestia that “it is important that the crypto currency and tokens are included in the legal field of the Russian Federation”:

“On the one hand, these are opportunities that we have no right to miss. On the other hand, while they are outside the legal field, they can be used to give bribes, withdraw money in the case of bankruptcy, pay ‘black salaries, and simply get stolen – with no repercussions [for criminals].”

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