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Is 2016 the Year Russia Legalizes Bitcoin?

Last Updated March 4, 2021 4:47 PM
Samburaj Das
Last Updated March 4, 2021 4:47 PM

The Deputy Chairman of the Russian State Duma Committee — the lower house of the Russian legislature — spoke about cryptocurrencies today. The deputy had a few interesting things to say about Russia’s hardline stance on cryptocurrencies in the past and possible future of the legality of Bitcoin in Russia, particularly for settlement with individuals and peer-to-peer transactions.

According to a report by prominent Russian news agency TASS , the deputy chairman spoke broadly about cryptocurrencies and Bitcoin today.

Wikimedia/P. Fedynsky Bitcoin
Andrei Lugovoi

Andrei Lugovoi, the Deputy Chairman of the Russian State Duma Committee for Security and Anti-Corruption claimed that Russia ranked 5th in the world for the number of people trading and using cryptocurrencies.

Citing expert estimates, Russia has approximately 200,000 users adopting Bitcoin and other cryptocurrencies. The United States ranked first, with 1.2 million users, followed by China at 355,000 users. Germany came in next, at 250,000 users, Lugovoi revealed.

He made the distinction amongst the naysayers and supporters of cryptocurrencies within Russia, picking out the Central Bank of Russia in particular. Those calling for cryptocurrencies to be banned pointed to the notion of its criminal usage. On the flipside, he also spoke about those who support the technology and the currency of bitcoin itself, calling for the legal regulation of the turnover of virtual currencies.

According to the publication, Lugovoi stated:

At the beginning of 2014, the Central bank had indicated its negative attitude towards cryptocurrencies…In summer of the same year, it was announced that the Central Bank was in favour of a careful approach to Bitcoin and saw a serious economic potential [with it].

The Deputy Chairman then revealed recent events in 2016, that could lead to a promising future for bitcoin in Russia. He added:

In the beginning of 2016, after a series of meetings with the fiscal authorities and businesses, it was stated that in the future, the Central Bank could begin to legalize and regulate certain transactions with Bitcoin, particularly peer-to-peer transactions and settlements with individuals.

The revelation could prove to be a significant turn in events for bitcoin adoption in the country. Peer-to-peer transactions and settlements between individuals would make for a marked contrast to when Russian authorities were proposing prison sentences for the ‘criminal’ activity of indulging Bitcoin.

Russian regulators and ministers have notably taken a notoriously hardline stance against bitcoin adopters in the past. As recently as the beginning of this month in February, the Russian Finance Ministry proposed a 2-year prison sentence for Bitcoin users. January saw European bitcoin-exchange BTC-E’s website blocked by a Russian regulator. The same month also had Russia’s Investigative Committee Chairman state that Bitcoin represents a “real threat to the financial stability” of Russia. He also added that it would be better to prevent the spread of the cryptocurrency in its initial phase (present times) before it becomes more popular.

However, there have been voices from within the Russian state that seek to embrace the cryptocurrency. Russia’s leading business daily, the Vedomosti, published an article urging the country to adopt Bitcoin, rather than ban it. As is the norm with blockchain technology lately, Russian Information Minister recently spoke about the “necessity to explore the use of blockchain technology, in the best interests of the public.”

Images from Shutterstock and Wikimedia.