August 2, 2014 2:06 AM

Russia to Ban Bitcoin, Again

One of the largest news agencies in Russia, RIA Novosti, reported today that the Russian Finance Ministry is preparing a bill to prohibit cryptocurrencies.

“The Ministry proposes to establish a ban on the issue of money substitutes, including in electronic form. Also proposes to clarify the provisions of the law on the Central Bank of the Russian Federation, extending the ban not only on the issue of money substitutes, but also to conduct operations with them,” according to RIA Novosti, and translated by Google.


“Among the possible limitations – a ban on the use of surrogates as a means of payment or to exchange for rubles or foreign currency. In addition, the Finance Ministry proposes to introduce administrative or criminal responsibility for the production and implementation of monetary surrogates operations with them, and to restrict access to information resources, providing production and operations with surrogates.”

According to RIA Novosti, the Ministry of Finance said that uncontrollable virtual currencies create shadow economies and due to their allowed anonymity, money substitutes have gained popularity for being used to buy illegal goods.

Specific proposals have not yet been announced, and the report out of RIA Novosti has not been independently verified by CCN.

But this isn’t the first time that Russia has claimed to be cracking down on virtual currencies.

Back in February 2014, Reuters reported that the Russian Prosecutor General’s Office said Bitcoin is illegal, and that Russian law stipulates that the only currency permitted is the official Russian ruble.

“Introducing any other monetary units or substitutes is illegal,” said the Russian Prosecutor General’s Office on February 6.

“Systems for anonymous payments and cyber currencies that have gained considerable circulation – including the most well-known, Bitcoin – are money substitutes and cannot be used by individuals or legal entities,” reported Reuters.

But just a few weeks ago on July 2, the Wall Street Journal reported that Russian authorities softened their stance on Bitcoin, with the central bank claiming that they wouldn’t hamper the usage of Bitcoin.

The Wall Street Journal reported: “The Bank of Russia is now accumulating information about so-called crypto-currencies and is not blocking Bitcoin, the central bank’s first deputy chairman Georgy Luntovsky said Wednesday.”

Luntovsky added that Russia needs to watch how the situation develops and that virtual currencies should not be rejected.

So it seems that either various Russian governmental authorities have opposing views on Bitcoin and are publicly butting heads on the issue, or they simply change their minds on the issue every few months. This announcement should probably be taken with a grain of salt, as it wouldn’t be surprising to hear in two weeks that Russia changed their mind once again.

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Taylor Tyler @taylortylerr

Journalist focusing on politics, cryptocurrencies, privacy and current events.