Report: Russia preparing bill to ban bitcoin, digital currencies

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Last month, the Wall Street Journal reported that the Russian Federation has softened its tone on bitcoin and other virtual currencies. Several months after there were reports that the Russian government banned bitcoin, the Bank of Russia announced that digital currencies shouldn’t be rejected but rather monitored.

The situation in Russia regarding the cryptocurrency market has been quite confusing indeed.

Reports have surfaced over the weekend that the Russian Ministry of Finance is preparing a bill to re-prohibit cryptocurrencies. Ria Novosti, which is one of the largest publications in the country, reported the latest draft of the law Friday.

According to a Google translation of the article, the Russian Finance Ministry is proposing a ban on the issue of substitutes to the ruble, which includes electronic money. Furthermore, the federal government is attempting to clarify the provisions of the law laid out by the central bank that not only prohibits digital currency but also related businesses.

Here is more from the report:

“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.”

Ria Novosti noted that the Russian government believes virtual currencies produce underground economies and the anonymous nature of bitcoin and others like it are giving individuals the means to purchase illegal goods and participate in illicit transactions.

The specifics of the proposal have yet to be issued, but if the report turns out to be correct then the rules could be released before the end of the year.

As previously noted, claims of Russia declaring bitcoin to be illegal have been examined before. In early February, Reuters reported that Russiain authorities confirmed that digital currency is illegal because it can be utilized for terrorism finance and money laundering schemes.

“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,” said Russian Prosecutor General’s Office said on Feb. 6, 2014.

A couple of weeks prior, the Bank of Russia posted a consumer alert warning about the speculative nature and the high volatility associated with bitcoin. “Citizens and legal entities risk being drawn – even unintentionally – into illegal activity, including laundering of money obtained through crime, as well as financing terrorism.”

This comes nearly a month after the Ecuador government officially banned bitcoin, and then in turn announced that it would be launching its own digital currency. The legality of bitcoin in Vietnam has also been unclear because authorities say the “bitcoinization” threatens the stability of the dong and the inflation rate.

Coinbuzz

CoinBuzz provides news and analysis on Bitcoin and other digital currencies. Founded in 2014, the site has quickly become a leading source of information on digital currency technologies, businesses, markets, and regulation.

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