Bitcoin Regulation in Russia Takes a U-Turn, Subject to Review
Russia’s stance towards Bitcoin and other cryptocurrencies has taken a U-turn. Last week, the country’s finance ministry stated that it is not in a hurry to introduce the Bitcoin draft law. The ministry is planning to review the draft once again.
Alexei Moiseev, the Deputy Finance Minister of Russia has announced that the ministry will not be pushing for a direct blanket ban on Bitcoin in the country. According to Moiseev, the review process will involve the participation of experts in Bitcoin and cryptocurrencies.
Russia is concerned about the implications of strict cryptocurrency regulations. While the ministry is still convinced about the role of Bitcoin in money laundering, terror financing, and other illegal activities. It is not ready to implement something that could potentially hamper innovation in the cryptocurrency and blockchain sector.
A Russian media outlet has quoted Moiseev saying (in Russian),
“We need to prevent criminals from using Bitcoin for illegal transactions and money laundering. Data from official European sources indicate the use of Bitcoin in over 80 percent of all suspicious transactions. At the same time, we have to ensure the role of the central bank as the sole issuer of currency in the country. We would like to take a more proactive approach in reviewing the draft by involving experts in the field.”
The Bitcoin draft law, in its current form, makes Bitcoin illegal in the country. Anyone involved in transmission or exchange of Bitcoin to ruble will be liable to prosecution. If convicted under the existing draft law, they will face up to 7 years imprisonment along with significant fines. The draft law has received a mixed response from different sectors of the Russian government. The Ministry of Justice had earlier expressed the need to further study the criminal liabilities. The draft proposes harsh punishment for those using Bitcoin and other cryptocurrencies, which is not proportional to the severity of the crime.
With recent developments, the introduction of Bitcoin regulation in Russia has been indefinitely put on hold. As the country’s leading financial institutions continue to explore the use of blockchain technology, the new resulting bill is expected to be a bit friendlier towards Bitcoin than the current draft.