Russia will likely restrict the use of virtual currencies such as Bitcoin in the months to come, and the new laws may be ready by next spring.
What Russian lawmakers want is to allow people to use their cryptocurrencies as they please, but they can’t use these “surrogate currencies as tender,” as stated by Aleksey Moiseev, the Deputy Finance Minister.
“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,” Moiseev added.
Officials say that they will open criminal proceedings against those who mint digital currency, but also against those who use them for transactions, while asking regulators to ban access to exchanges and online stores that accept Bitcoin.
It seems that the cross-border nature of virtual currencies, along with the fact that transactions take place anonymously and that there’s no supervisory body, is bothering regulators. They believe that makes currencies such as Bitcoins perfect for illegal transactions, ranging from money laundering, purchases of illicit goods and funding terrorism.
Furthermore, the cryptocurrencies are also quite volatile as they fluctuate wildly due to the fact that they aren’t actually backed by any assets. This takes people in the situation of losing a lot of money as the prices fluctuate.
For instance, it was just a few months ago that one Bitcoin cost $1,200 (€925), competing with the price for the ounce of gold, but now it has dropped to $478 (€368).
Russia’s Central Bank has already taken the time to warn people of the danger of virtual currencies that are not under its control several months back. Several other countries have taken similar stances on the matter, while others have wholeheartedly embraced it.
The supposition that virtual currencies are being used to support terrorism is likely true, but that doesn’t make Bitcoin the root of all evil. Regular currencies, such as the US dollar, the European Union Euro and many more, have been used by extremists for decades. As long as the transactions are in cash, these too are very hard to keep track of.
The real issue is most likely the fact that no government has control over the currency, allowing people freedom like never before.