Russia does a complete U-turn from pushing for a bitcoin ban to legally acknowledging the cryptocurrency.
Come 2018, Russia could recognize bitcoin and other cryptocurrencies as authorities seek to enforce rules against money laundering to essentially monitor all bitcoin transactions.
Rounding off a significant turn from the authoritarian stance toward bitcoin in Russia, Deputy Finance Minister Alexei Moiseev has now talked about acknowledging bitcoin and cryptocurrency in a legal capacity in 2018.
In quotes reported by Bloomberg, Moiseev revealed the Russian state’s intention to include bitcoin transactions in Russia under its purview, hinting toward possible regulations of the bitcoin industry in the near future.
The state needs to know who at every moment of time stands on both sides of the financial chain. If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.
To this end, the Bank of Russia, the country’s central bank, is reportedly working together with the Russian government on a common stance toward digital currencies, which could speculatively lead to regulation.
Bank of Russia deputy governor Olga Skorobogatova has notably spoken about regulating the bitcoin industry earlier this year:
With Bitcoin – a private currency, it became clear that [regulation] was not simple. Regulators and authorities agree that they would not like to specifically prohibit [Bitcoin]. [We] would instead like to understand it and on this basis build a regulatory framework.
Longtime readers will remember Moiseev for spearheading the effort to ban bitcoin in 2014, as the official set to path plans to ban the cryptocurrency.
Russian users saw the threat of fines in late 2014 for adopting bitcoin. By February 2016, the bitcoin ban plan saw the Russian Finance Ministry controversially propose a 2-year prison term for bitcoin adopters. The following month, an amendment to that proposal by the regulator sought to push a 7-year prison term.
Moiseev continued to push for legislation to ban bitcoin in early 2016, expressing his intent to pass the proposed bill through Russian parliament to enforce the ban by August.
“While the work on the bill is ongoing, it isn’t moving very quickly,” said Moiseev in April as the bill faced criticism. A handful of Russian ministries, including the Ministry of Justice, disagreed with the bitcoin ban bill.
By October 2016, the bitcoin ban bill was on indefinite hold. At the turn of 2017, Moiseev admitted that bitcoin posed no threats. A year after bitcoin users were threatened with prison terms, the cryptocurrency was no longer to be banned.
The Bank of Russia, which will now join the government in a joint approach toward digital currencies, has notably explored blockchain technology for over a year. The apex bank established a blockchain working group in February 2016 and soon revealed plans to develop a blockchain platform for the Russian banking industry. By October 2016, the Bank of Russia had developed and tested an Ethereum-based blockchain prototype called Masterchain, to be used by Russian banks.
Bank of Russia deputy governor Olga Skorobogatova has also publicly spoken about the possibility of a national digital currency based on a hybrid network of public and private distributed ledger systems.
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Last modified: January 26, 2020 12:10 AM UTC