Russia is set to become the latest country to restrict virtual currencies such as Bitcoin, after a top official announced that a law will be passed banning their exchange into real money by next spring due to their use by criminals and terrorists.
“People can play with their chips, and they can call them
money, but they can’t use these surrogate currencies as
tender,” Deputy Finance Minister Aleksey Moiseev told
journalists in Moscow.
“We will discuss this law in the current session of
parliament, and possibly even pass it then, or at the very latest
by spring next year. We are currently dealing with comments from
the law enforcement agencies, about the specifics of legal
measures, and we will take their remarks into account. But the
overall concept of the law is set in stone.”
Although the draft of the proposed legislation has not been
published, officials say they will open criminal proceedings
against both: those who mint digital currency – usually with the
help of powerful computers – and those who use them for
transactions. The finance ministry has also asked regulators to
ban access to exchanges and online stores that accept bitcoin.
In their notes explaining the reasons for the impending ban,
Russian officials unleashed a familiar two-pronged attack on
cryptocurrencies, the oldest of which, bitcoin, was launched five
years ago. Law drafters say that virtual currency’s cross-border
nature, transaction anonymity and lack of supervisory body makes
it the perfect vehicle for illegal transactions – be it money
laundering, buying illicit goods, rendering illegal services or
funding terrorism. On the other hand, since it is not backed by
any assets, cryptocurrency is liable to fluctuate wildly, so the
ban would be a protective measure that would prevent people from
losing money as a result of speculation.
The move appears to be
largely pre-emptive, as bitcoin and its iterations remain a rare
novelty in Russia, at least insofar as being a conduit for legal
transactions. Nonetheless, Russia’s Central Bank had already
recommended that Russians be “wary” of using cryptocurrencies as
far back as January. It was thought bitcoin might be given a
reprieve this summer, when a senior Central Bank official said
that “it’s quite possible cryptocurrencies are the future,” but
that turned out to be no more than a soundbite.
Moiseev said that Russia “was following Europe’s lead”
on virtual currencies, but while many financial bodies in Europe
have dismissed or criticized bitcoin, it has not been outlawed
entirely anywhere on the continent.
In fact, the only two countries that have explicitly criminalized
cryptocurrencies are Bolivia and Ecuador, the latter of which
plans to develop its own virtual currency. Nonetheless, the
future of cryptocurrencies remains tentative, as many countries
are waiting to see how the new financial trend develops before
passing prohibitive legislation.
Article source: http://rt.com/business/187440-bitcoin-ban-russia-cryptocurrency/
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