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Russian Federation
5.57 Neutral Environment
Three main periods can be identified in the evolution of the attitude of Russian regulators to cryptocurrencies and blockchain projects. The first period is characterized by the inclination to ban the turnover of cryptocurrencies. It started when Russian regulators first paid attention to the industry, namely, with the statement of the Central Bank in early 2014. The press service of the Central Bank named virtual currencies a cash surrogate and said that their release was prohibited in Russia. At the beginning of 2016, the Ministry of Finance worked on a bill aimed at banning the circulation of cryptocurrencies. Later, the Ministry of Finance rejected this idea.
The second period is characterized by the highest intensity of discussions and the presence of conflicting opinions. In October 2017 these debates were finalized with the victory of the official approach envisaging the legalization of cryptocurrencies and blockchain projects. Russian President Vladimir Putin instructed the government to develop appropriate legislation in line with AML and CTF regulations and investor protection, as well as, he proposed to organize a regulatory sandbox for such projects on the basis of the Central Bank.

At the end of 2017 and the beginning of 2018, the new, third period in the evolution of the attitude of Russian regulators to cryptocurrencies and blockchain projects started. This ongoing period is marked by a more lenient attitude of state authorities to the industry. In May 2018, two bills passed their first readings in the State Duma: "On digital financial assets" and "On digital rights."

However, the segment of cryptocurrencies and blockchain projects remains virtually unregulated in Russia as long as the said documents remain draft laws. As soon as they have been adopted and sustainable legal practice has developed, it will be possible to speak about an all new period in the attitude of Russian regulators to cryptocurrencies.
Neutral Political Environment
6.0 points
The attitude of the largest political entities of Russia to cryptocurrency and blockchain projects has been changing. Although initially they took an extremely negative position and advocated a prohibitive policy in this area, the discourse of reasonable regulation currently prevails. At the top level, pros and cons of the cryptocurrency market are emphasized. At the same time, the overwhelming majority of stakeholders' focus on the strengths of distributed ledger technologies and possibilities for their application in business, government and public spheres.

In fact, the position of the state authorities changed dramatically after the statements of Russian President Vladimir Putin, who spoke in favor of reasonable regulation of the crypto industry. Following him, the main actors began to demonstrate a more flexible and lenient attitude. In principle, this situation is characteristic of the political regime in Russia, where the President calls the shots virtually for everything.
Not Enabling Legal Environment
2.0 points
Regulatory Convergence
At the moment, there is no special legislation regulating blockchain projects and the circulation of cryptocurrencies in Russia. Regulation of cryptocurrencies and blockchain projects is not within the competence of a single body. The central process in regulating the sphere currently lies in the development of special legislation, in which the Central Bank of Russia, the Ministry of Finance and the State Duma (Parliament) are engaged. So far, regulators have developed a unified approach, which is reflected in the bills that have passed the first reading in the State Duma.

Definiteness of Legal Regulation
Currently the legal status of cryptocurrencies and blockchain projects is not defined in Russia. Some aspects of the crypto-industry are settled by analogy (taxation), but for the most part, legislation in the field of cryptocurrency and blockchain is missing. Despite the absence of legislative norms regulating ICOs and clarifications of state bodies on regulation by analogy, "legal ICOs" are taking place in Russia. At the same time, the existing law enforcement and judicial practice give no clear understanding of which legal provisions apply and how they apply to protect investors, prevent criminal transactions and money laundering, and regulate tax collection within the framework of ICOs.

Stability of Legal Regulation
The situation in the legal regulation of cryptocurrencies and blockchain projects in Russia is rather unstable, because at the moment there are several bills dealing with the matter being considered in the Parliament.

Adequacy of Legal Regulation
It is difficult to assess the nature of regulation in Russia, because most of the relations associated with the turnover of cryptocurrency and blockchain projects are not regulated. Among positive developments, it should be noted that a "regulatory sandbox" was organized on the basis of the Central Bank, where experimental ICOs have been successfully conducted.
Situation with the Rule of Law
Russia has low indicators of the rule of law, ranking 89th in the world among 113 countries. The conditions of the legal regulation of blockchain and cryptocurrencies are neutral, but since the values of the sub-criterion of the rule of law are low (0.47), the amount of the difference between weighted (multiplied by Rule of Law Index score) and unweighted assessments are significant. This indicates high risks associated with the general conditions of compliance with legal safeguards in Russia.
Enabling Infrastructure Environment
8.72 points
The Russian Federation ranks 32 out of 193 countries in the UN E-Government Development Index of the telecoms and online services infrastructure.

Russia is the 35th country globally by the ease of doing business in the WB's Doing Business rankings.