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The Russian Bitcoin Ban Plan is on Indefinite Hold

Last Updated March 4, 2021 4:51 PM
Samburaj Das
Last Updated March 4, 2021 4:51 PM

The Deputy Finance Minister of the Russian Federation has now stated that the spread of bitcoin in Russia does not represent a threat the country’s financial ecosystem, at its current rate of adoption. As such, the plan to ban the cryptocurrency is now paused.

Alexei Moiseev, the Deputy Finance Minister who has primarily spearheaded the Russian Finance Ministry’s intent to ban bitcoin beginning two years ago in 2014, has now stated that the cryptocurrency isn’t a threat to Russia’s financial system.

At the time, Moiseev deemed bitcoin and cryptocurrencies as “surrogate currencies” – a narrative that has stuck to this day – while stating that the law to ban bitcoin will be passed in 2014, or 2015, at the latest. Such a law has not come to pass.

In recent comments reported by SputnikNews , Moiseev stated:

All of this [bitcoin] does not pose much of a danger to the public, as it has not taken on a mass character that could pose a threat to our financial system right now.

He then added:

In the future, it could possibly emerge given that it is not regulated.

The comments directly contradict those of Alexander Bastrykin, chairman of Russia’s Investigative Committee who has previously stated that bitcoin represents “a real threat to the financial stability” of Russia. The official then opined that the spread of bitcoin or money “surrogates” should be curbed.

The Long Road to Quell Bitcoin

Moiseev and the Ministry of Finance initially proposed a 4-year prison sentence for bitcoin users late last year in an effort to enforce a new amendment to the Criminal Code. In what could be seen as a move to bring brief respite, the Ministry then proposed a 2-year “corrective labor” sentence – a combination of penal dentention and forced labor – for bitcoin adopters, earlier this year.

However, a proposal from March 2016 saw the Ministry turn up its scrutiny further, amending that proposal to seek  a 7-year prison term along with massive fines for bitcoin adopters and companies in the country.

Bitcoin Ban Bill Sees Roadblocks

The following month, the Ministry’s efforts to accelerate its bitcoin banning proposal ran into trouble. The submitted draft did not fare well with reviewers critiquing its contents who insisted upon multiple revisions to the draft. Moiseev stated at the time:

While the work on the bill is ongoing, it isn’t moving very quickly. Everyone who reads the bill repeatedly highlights the necessity to clarify the wording [of the bill]. Hence, we will be refining it.

Then in May, a resubmitted version of the draft saw further scrutiny from the Ministry of Justice and the Interior Ministry of Russia, who questioned the “public danger” that Bitcoin is supposed to have threatened with, as suggested by the Finance Ministry.

Merely days later, the Ministry of Justice – once again – refused to agree on a revised draft bill submitted by the Finance Ministry.

The continued friction and the lack of support has seemingly taken a toll on the Finance Ministry and Moiseev, who later admitted in August that the bitcoin ban bill, while ready, will not be rushed.

More notably, he had stated:

Perhaps, in the view of the development of technology, a frontal ban [of bitcoin] will not do very well.

Banning Efforts, Paused

Coming back to the present, Moiseev has now revealed that the Finance Ministry has put its previously-fervent initiative to ban bitcoin and cryptocurrencies on hold.

This pause in the Ministry’s efforts will see the regulator look at how other counties are regulating cryptocurrencies, according to Moiseev.

He stated:

 We have a chance to wait for a while in order to see how the situation unfolds…

Featured image from Shutterstock.