Last Updated on
Russia’s government has been taking much thought into the possibility of driving a wedge into their country’s crypto industry. Several groups have been hoping that the state would fully legalize cryptocurrencies, but the Kremlin has for more intensive regulatory plans. The Russian government plans on banning crypto payments in their country, as reported by a local news outlet, Izvestia.
When in Doubt, Forbid it All
The Central Bank of Russia has been preparing to issue a blanket ban with the help of the Rosfinmonitoring, the Russian financial watchdog.
Alexei Yakovlev, the deputy head of the Russian Ministry of Finance’s banking regulation department, made his opinion clear. He could not see any use of the payment systems that make use of Bitcoin. Thus, Yakovlev considers the need to curb this rising trend of Bitcoin payment processors in Russia.
In a statement given to the press, the Russian Central bank’s press office explained that only the Russian ruble was Russia’s payment means. They believed that crypto held
significant risks, including risks related to money laundering and terrorism financing.
A Growing Ecosystem
Russia’s crypto ecosystem has enjoyed a significant amount of growth over the years. A large number of cafes, bars, and online stores are well known to accept Bitcoin as a payment method. Russia also hosts an extensive network of remote workers, offering services abroad while staying on Russian soil. These freelance workers and their international counterparts make use of Bitcoin in order to dodge the incredibly large amount of taxes that come with international payments.
While incredibly volatile, Bitcoin is desirable as a form of currency due to its very high liquidity. This makes it the perfect asset to do business in for many individuals across the globe.
RBC, a Russian news outlet, reported that several agencies of Russia’s government had been given the task of creating and enforcing new crypto procedures. These procedures must help the Russian government seize cryptocurrencies that have suspected involvement with criminal activity. The agencies in question are institutes like the Justice Ministry, the Ministry of Internal Affairs, and the Prosecutor General’s Office to name a few. These groups will work together with the Russian Supreme Court in order to seize these various assets.
Putting these new regulations, the Russian government’s plans will not be easy. Konstantin Golikov, the co-owner and CEO of DailyRich, explained that these regulations must first be made public in order to properly facilitate confiscation. To further compound it, crypto must first be legally recognized as cash or something equivalent.
Through this stipulation, Golikov explained that officially making laws to confiscate crypto would mean that “they are launching a mechanism for legalizing cryptocurrency” in Russia. However, he suspects that the Bank of Russie will offer massive resistance in recognizing crypto as money.