The article analyzes the current situation in the EAEC in the issue of implementation of supranational cryptocurrency. The review of a current condition of legislations of the countries-participants of the union in a direction of acceptance and development of cryptotechnology is made. Creation of supranational crypt-currency based on International Astana International Financial Centre will give the chance to Kazakhstan to reconsider scenarios of continuing devaluation of national currency, thus creates preconditions for harmonious integration into the international economy. The government of Kazakhstan is generally open to Blockchain technology and cryptocurrencies, but strict legal regulation requires further improvement in pursuit of a successful digitalization policy.
Keywords: supranational cryptocurrency, EAEC, AIFC, blockchain, cryptotenge.
В статье проанализирована текущая ситуация в ЕАЭС в вопросе внедрения наднациональной криптовалюты. Сделан обзор текущих подготовок стран – участниц союза по направлению криптотехнологии. Создание наднациональной криптовалюты на базе Международного финансового центра Астана даст возможность Казахстану пересмотреть сценарии продолжающегося девальвирования национальной валюты, тем самым создаст предпосылки для гармоничной интеграции в международную экономику. Правительство Казахстана в целом открыто для технологии блокчейн и криптовалютам, но жесткое правовое регулирование требует дальнейшего совершенствования во имя успешной политики по цифровизации.
Ключевые слова: наднациональная криптовалюта, ЕАЭС, МФЦА, блокчейн, криптотенге.
The aggressive volatility of tenge or its rapid devaluation has again put domestic business at risk. Many import contracts turned out to be bonded, leaving unhappy export-import players overboard.
Against the background of these situations of tenge (KZT) devaluation the issue of creation of the cryptocurrency in Kazakhstan is becoming more and more vital. Let's follow the reality that the creation of the cryptocurrency in our country is not yet a desired option, but the creation of a common currency within the Еurasian Economic Union (EAEU) is not far off, given the appearing preconditions in the participating countries. One of the main is that it is a necessary condition for the integration of the economies of the EAEU countries to improve trade turnover between the member states. The expert community is in solidarity in its assessments: the realization of the project's potential will produce a noticeable economic effect for all its participants. The integration of payment systems requires a two-stage gradualist approach, which implies not only initial integration of financial technology systems, payments, transfers and investments at the level of the EAEU, but also the creation of such systems, ensuring their stable and sustainable functioning, bringing them to common standards, approving the principles of transparency, overcoming potential cyberattacks and laundering of criminal proceeds [1]. Only after overcoming this first stage, it is possible to start broader integration of financial technology systems within the EAEU into the international system under the second stage, which could include the creation of a supranational cryptocurrency.
According to experts, the process of development and use of cryptocurrency is going on with different intensity in the EAEU member-states. Let's consider, in what condition is creation of the national cryptocurrency in the EAEU countries and what are possibilities of working out of the national on [2].
In autumn 2017, Astana International Financial Centre (AIFC) started to develop and promote the crypto-assets market in Kazakhstan. In this direction it was possible to achieve results — within the framework of AIFC there was created a legal field for circulation of cryptocurrencies, regulation and functioning of special trading platforms, i.e. exchanges [3]. In particular, in the same year the State Program «Digital Kazakhstan” was approved, within the framework of which the main trends of digitalization in the sectors of economy, activities of government agencies, and development of human capital were defined. This programme, in its essence, is a response to new challenges and creates the preconditions for introducing projects based on innovative technologies into the country's economy. In this regard, the development of Halykkoin (HLC), its own cryptocurrency, and Altyncoin, a supranational cryptocurrency, are becoming more and more popular in Kazakhstan, which, according to the developers, should be the currency of Kazakhstan as a dollar in America and be a means of payment [4]. But it seems to me that controlled cryptocurrency will automatically be inherited all problems of economic sector of Kazakhstan.
In the Kyrgyz Republic, the National Bank's restriction on the use of cryptocurrency as a means of payment has been in force since July 2014. The Bank has named the local currency som (KGS) as the only legal means of payment. However, despite the official ban, there are various cryptocurrencies in the financial market of the country, among which the most common is bitcoin. The legislation does not prohibit the development of blockchain projects, including the mining and trading of cryptocurrencies and does not hinder their activities [5]. This is facilitated by the republic's goal of obtaining the necessary foreign investment to develop gold deposits. The Kyrgyz authorities are planning to develop and introduce a national cryptocurrency, with the planned name of GoldenRock, which will be provided with gold. Hypothetically, if the Kyrgyz cryptocurrency is to be provided with gold, it is rather an upgrade of the existing currency towards digitalization.
In Russia, at the same time as Kazakhstan, the development of legal and regulatory support for the cryptosphere began after the adoption of the «Digital Economy Program of the Russian Federation”. In the summer of 2017, The Central Bank of the Russian Federation announced plans to create a virtual national currency, the CryptoRuble. However, as early as in December, the RF Ministry of Finance announced that it was not expedient to introduce a national digital currency. This is primarily because the CryptoRuble has an unlimited number of emission centers and that regulators will not be able to provide absolute reliability of transactions with this asset [6].
According to the Decree of the President of the Republic of Belarus «On the development of the digital economy”, Belarus has established a free economic zone for any cryptocurrency, and digital transformation has been recognized as a key priority of national development [7].
In Armenia, the Central Bank notes that the use of Blockchain technology and cryptocurrency are at the stage of serious transformation in this area and therefore calls on all participants to refrain from transactions with cryptocurrencies. The cautious attitude of the Central Bank of Armenia towards the cryptocurrency is conditioned by the following factors: — the balance of financing of terrorism and money laundering is significantly complicated; — there are no agreed international standards regulating the activities in the fields of blockchains and cryptocurrency; — the dubious effectiveness of the large costs of ensuring safe and multi-purpose circulation of cryptocurrency, including its mining, issuance and circulation [8].
As it turned out, not all countries have regulation of the cryptographic environment at the state level: in some countries, self-regulatory organizations, which include large technological companies contributing to market development, are engaged in law-making. For the EAEU countries, the creation of a supranational cryptocurrency is fraught with abandoning the status of their central banks as a central issuer of national currency, which is stipulated in the Constitutions.
If this principle is abandoned, a supranational cryptocurrency may appear. At the same time, no country can guarantee the reliability of transactions, because the confirmation of transactions will depend entirely on the producers of this currency.
Other things being equal, the cryptocurrency can significantly undermine the position of the national currency. Even with an average rate of entering the economic reality and the unstable rate of growth of the cryptocurrency can have a noticeable impact on the results of modeling, forecasting and, ultimately, the understanding of monetary circulation in making monetary policy decisions.
This attitude towards the creation of a supranational cryptocurrency is based on certain difficulties in its management at the state level: it concerns the ability of governments to regulate inflationary processes; limitations of the state's function related to money emission; protection of private investors who will invest national money in supranational cryptocurrency; collection of tax deductions to the budget system from the turnover of cryptocurrency; confrontation with shadow markets, including the shadow turnover of the same cryptocurrency.
This task can be solved not only by improving national legislation, but also by harmonizing digital financial legislation in the EAEU members [9]. The first steps in this direction have already been taken. In particular, the development of financial relations in 2019 in the EAEU countries in the area of digitalization resulted in the coordination of a plan of joint actions of the Eurasian Economic Commission and the Astana International Financial Centre to implement measures related to the preparation of proposals for the regulation of digital financial products and services, Internet commerce, the creation of regulatory «sandboxes” in the EAEU to test innovative financial solutions, the development of digital trade infrastructure, and the protection of consumers' rights.
At present the possibility of general regulation of this sphere is also under consideration. But given the even more conservative position of the domestic regulator than in Russia, it will be a complicated process, but it is necessary to pass it, especially if Kazakhstan really wants to develop the digital economy.
Probably, it is necessary to create the uniform payment system of EAEU because of an infrastructure of periphery, for example on a platform of the AIFC. In this case, the responsibility for implementing payment and settlement operations lies with Kazakhstan. If Russia as the EAEU center delegates the functions of payment and settlement operations to the periphery, it will be necessary to introduce a new currency unit on the model of the previous E. C. U. within the framework of the European Currency Unit. It would be advisable to create the Single Payment System (SPS) within the framework of relatively equal countries in terms of economic development. If, however, this system is created and Russia heads it, the rest of the EAEU states will be deprived of a part of budgetary, fiscal and monetary independence, and the principles of federalism with a single decision-making center will have to be observed in the EAEU.
The possibilities to form a SPS based on the AIFC as a center of integration into the EAEU are limited by the volatility of the tenge rate and other factors, in particular, the pricing policy for petroleum products. However, strengthening the position of tenge in the EAEU is necessary for the development of the integration process of Kazakhstan by attracting more participants to trade in national currencies on the Kazakhstan Stock Exchange (KASE), including residents of EAEU member-states, CIS and other countries; increasing the interest of participants in foreign economic activity of EAEU countries in using their currencies in mutual trade by providing favorable conditions for trade in currencies on the KASE, including the provision of tax benefits; exclusion of the administrator of the EAEU countries from the list of countries with which the EAEU member-states are located.
It is encouraging that Kazakhstan is actively working to introduce this technology in the work of large public sector organizations. In particular, projects conducted by such organizations as the State Revenue Committee, the National Bank, the Kazakhstan Stock Exchange, and the Astana International Financial Center have been publicly announced [10].
According to Alan Dordzhiyev, President of the National Association of Blockchains and Cryptotechnologies, the Government of Kazakhstan is interested in cryptotechnology.
«Kazakhstan has all opportunities to become a major player in the global block-ecosystem. The country has one of the lowest electricity prices in the world — it really attracts interest from foreign investors interested in building data centres”, Dordzhiyev added [11].
Kazakhstan has always been an attractive destination for foreign investment. In order to remain competitive, it is worth being open to new trends in financial management. The reality is that worldwide, there is a growing demand for the use of cryptocurrencies in most areas of financial intermediation. For example, representatives of the well-known cryptocurrency project from Facebook Corporation, Libra, which was harshly criticized by governments of almost all economically developed countries for the idea of becoming the world's main digital stable currency, announced a complete change of concept. It was stated that the goal of creating a single global digital currency, backed by a basket of national fiat currencies, no longer exists. As noted in the updated White Paper project, the Libra Association is going to develop several steblecoins, which, in turn, will be tied to the fiat currencies: the U. S. dollar, euro and British pound. «Each steblecoin will be 100 % backed by a reserve, consisting of cash or cash equivalents and short-term government securities, issued in this currency”, the document says. It is expected that this approach will help to find consensus with regulators, who have repeatedly expressed concern about the potential negative impact of Libra on the global financial system. The launch of the project is also scheduled for 2020 [12].
In addition, it is noteworthy that Alipay has allegedly confirmed its participation in the project of a new Chinese digital currency payment system (DCEP).
The fact that Switzerland's jurisdiction is recognized as the most successful for companies in the field of blockchains and cryptocurrencies according to BlockShow Europe 2018 makes one think about the inevitability of a cryptic future in the financial market [13]. So why shouldn't Kazakhstan start creating its successful future in the digital-crypto world of finance already now?
References:
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