Will Be The Cryptozone Created in Crimea?

The Blockchain platform Tavrida was introduced at the recent Yalta International Economic Forum. The platform can be used for attraction of investments for Crimea in circumvention of sanctions.
A year ago there were plans on creation of a regional cryptocurrency in Crimea. It looks like authorities are willing to create a free crypto-zone in Crimea, however, there are some obstacles.

Here is my attempt to understand: is it really possible to create a cryptozone in Crimea or not, and what has to be done for this purpose. Let's begin with the Tavrida blockchain platform.

Tavrida Blockchain Platform

Tavrida is a proprietary blockchain operating on the basis of smart-contracts. Tavrida coin (TVR) is a digital asset which is rented by the user to make transactions in a blockchain while not being a security.

According to the founders, the main purpose is to provide entrepreneurs with the user-friendly tool for attraction of investments. It is considered that entrepreneurs will tokenize their assets by issuing TVR, and investors will buy TVR. The acquired coins allow an investor to influence the company's activity and receive dividends. All of these will be prescribed in the smart-contracts.

As for the founders, it will allow Crimean business to bypass sanctions because transactions will be conducted without participation of financial intermediaries such as banks and payment operators.

For now there are several functions available in Tavrida:

  • Personal area registration
  • Funds deposit/withdrawal in BTC, Ethereum, Ruble
  • Possibility to tokenize funds in TVR Bitcoin, TVR Ethereum, TVR Ruble
  • Possibility to exchange assets between users

Personal Area Registration

In order to sign up to the service you need to fill in your e-mail and nickname in service.

Depositing/Withdrawal

You can deposit funds with three currencies at the moment:

  • BTC, Ethereum - you receive an individual address, you can top up the balance by transferring money
  • Rubles - you transfer funds to the account listed in your personal area
Withdrawal:

For withdrawal you need to create an order in which you should appoint an address of the recipient's wallet for cryptocurrency or a bank account number of individual or your company.

Tokenization of Funds to TVR Bitcoin, TVR Ethereum and TVR Rubles

If you have funds on your balance, you can tokenize them to TVR. These tokens are digital assets which you can use to pay for services, make investments, exchange funds with other Tavrida users.

Exchange of Funds between Users

You can exchange funds with other users by one click on the correspondent page. For the date of April 22, 2019 there are only two orders for exchange.

Not available functions

Many previously announced functions such as possibility to tokenize real assets are not available yet. Moreover the news division and the company blog (which is also the website of the Tavrida venture fund) are out of service.

There is one more worrying fact - since the Pre-ICO conducted in May last year there was almost no activity in the platform.

Considering information mentioned above we can conclude that Tavrida blockchain platform is a project with unclear perspectives. It's future mostly depends on perspectives of the Digital Financial Assets Law. This law can legalize activity of such platforms. Apart from opening Tavrida, authorities are considering creation of the regional cryptocurrency in Crimea.

Crimea Cryptozone and Cryptocurrency

It was planned to create a regional cryptocurrency and all conditions for legalization of ICO, cryptocurrencies and investment funds. Project realization depends on Digital Financial Assets Law, which is similar to Belarus Digital Economy Development Decree we have disclosed earlier.

There is an opinion that creation of cryptozone in Crimea could increase investment attractiveness of the region in circumvention of economic sanctions. However, due to absence of the legislative base which has to be provided by the Digital Financial Assets Law, creation of regional cryptocurrency and crypto-district seem improbable.

It is obvious that this law is very important and it is still under consideration of the parliament. Read about the way the law has passed from its initial stage to the second revision below.

Digital Financial Assets Law

The law was offered for consideration on March 20, 2018 by the Financial Markets National Duma Committee. There were only five articles in the law:

  • Article 1 - the purpose of the law
  • Article 2 - definition of the basic terms (cryptocurrencies, smart-contracts, digital records etc.)
  • Article 3 - procedure of token emission - the sequence of actions and rules for token emission are defined
  • Article 4 - the way of handling financial assets is defined:
    • transfer of tokens, tokenization and exchange to fiat can be conducted only on the platform of accredited crypto exchange
    • the rules for information storage for the digital financial assets deals are defined
  • Article 5 - the period for the law enforcement is defined (it takes 90 days since the moment of publication)

The law was accepted in first reading on March 22, 2018. The law had to be reviewed in the second reading on March 19, 2019, however new version of this law with amendments made by the special committees (about adding the detailed description of cryptocurrency, mining, tokens and the digital assets notion) is not published yet. Maybe that was the reason why the law consideration in the second reading was moved on April, 2019. You can check updates and new amendments to the law on the National Duma website (in Russian).

The Cryptozone in Crimea. Is it possible?

It all depends on Digital Financial Assets Law. The thing is that the fact of acceptance of this law and it's content will play a significant role. Consideration of the law in second reading had to be done in April and that is when the new version of this law has to be published as well.

The only thing that is absent in the current version of the law is the way of cryptocurrency creation described in details. All other things, such as definition of tokens, the way they are used and emitted, are included in the content.
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