Russia Drafts A Bill To Ban Bitcoin

Russia’s Ministry of Finance has announced proposals to ban the issuance of bitcoin and any operations involving crypto-currency. The legality of bitcoin has been discussed frequently in Russia since the beginning of this year. The Bank of Russia was the first government agency in the country to warn citizens and businesses about the risks associated with digital currencies like bitcoin.

Finance Ministry announced on the government’s regulation website that it was drafting a bill relating to cryptocurrencies, which, if approved, will likely see those who break the new laws end up in jail. The Finance Ministry plans to make amendments to Article 27 of the Federal Law ‘On the Central Bank of the Russian Federation’, specifically banning the use of monetary surrogates, including cryptocurrencies.

According to the ministry, the ban is necessary as monetary surrogates are widely used for buying illegal goods and money laundering. Moreover, the government agency intends to restrict access to websites that enable people to buy, sell, transfer and use cryptocurrencies.

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The announcement from Russian Officials said: “According to Article 27 of the Federal Law ‘On the Central Bank of the Russian Federation’ (Bank of Russia) the official Russian currency is ruble. The issuance of monetary surrogates in Russia is forbidden as well as the introduction of other monetary units. However, monetary surrogate has no standard definition in the Russian legislation.”

“Сryptocurrencies have no real value and their prices are determined due to speculations. So, there is a great risk that investors will lose their money,” the ministry’s statement concluded. On a more positive note, the Wall Street Journal last month reported that the Bank of Russia said it would not seek to take harsh measures against cryptocurrency use.

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Bank of Russia deputy chairman Georgy Luntovsky said: “At this stage, we need to watch how the situation develops with these kinds of currencies. These instruments should not be rejected.” Discussion on the bill is open until the end of this month and, if approved, the amended act will come into force in 2015.

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