Russia’s Investigative Committee Chairman Alexander Bastrykin spoke about the country’s economy and the usage of cryptocurrencies like Bitcoin in Russia, in an interview today.
The head of the Investigative Committee of Russia, Alexander Bastrykin spoke about corruption plaguing the country in an interview with the Rossiiskaya Gazeta or the Russian Gazeta, a daily publication founded by the Russian state.
Bastrykin quickly highlighted the cost of crimes caused by corruption in the past five years at 90 billion rubles. In today’s exchange rate with the dollar, that’s about $1.2 billion. Notably, before economic sanctions and measures were imposed by the United States and other countries against Russia in recent years, the ruble was more than twice stronger in its present value against the dollar in 2014.
The interview covered a range of topics before the publication winded down to what it called the ‘key question’: How can the national currency be protected given the current economic situation?
Bastrykin spoke about the inadequacies of criminal liabilities against those who engage in illegal insider information to manipulate the currency market.
To this end, Bastrykin sees the mining and circulation of currencies such as Bitcoin to also represent a threat to the financial stability of the state.
He revealed that ‘concerned agencies’ working in cooperation with the Investigative Committee that he oversees have made proposals to “criminalize the production and trafficking” of money substitutes. Russian law, as things stand, bans the issue of any currency that isn’t approved by the Central Bank of Russia.
Russian lawmakers and regulators’ concerns about Bitcoin has been well documented. The Russian Finance Ministry recently proposed a 4-year prison sentence for bitcoin adopters in the country.
The need to introduce criminal responsibility for the act in in question has seen widespread [use] in recent years, the trafficking of so-called virtual cryptocurrencies, the most famous of which is Bitcoin.
In expanding upon his opinions of Bitcoin, he points to individuals ‘issuing’ cryptocurrencies rather than a central authority or state, which he adds – makes cryptocurrencies subject to wild fluctuations in their price. He also sees anonymity in payments as motivations for criminals to use virtual currencies for trafficking of drugs and arms, tax evasion and terrorism.
The Commissioner then pointed to an emergency meeting of European Union ministers in Brussels in the immediate aftermath of the terrorist attacks in France. He revealed that, at the end of the meeting, recommendations were prepared to ban anonymous payments and their facilitators – cryptocurrencies and prepaid cards.
The Commissioner then acknowledged Bitcoin as a threat, or a currency that’s soon to be a “real threat to the financial stability of the state.” He cites experts’ estimates which claim that “the turnover of money substitutes in Russia” currently makes for 1 percent of the country’s GDP. He sees the scenario of Bitcoin and other “surrogates” being a “real threat” when they exceed a figure of over 10 percent of the GDP.
“As a result, the state may lose the monopoly on the issue of money and the income from this activity (of issuing money),” Bastrykin added.
The very end of the interview had the Commissioner remarking:
Therefore, it would be better to prevent the spread of surrogates at their initial stages of development.
Meanwhile, Russia’s immediate neighbor to the west, Ukraine, is taking a different stance toward the cryptocurrency. Ukraine’s largest bank, Privatbank, is now helping online retailers with the means to complete settlements in Bitcoin.
Disclaimer: The quotes and content are roughly translated from Russian.
Featured image from Shutterstock.
Last modified: May 21, 2020 10:35 AM UTC