Russia’s Finance Ministry wants to ban Bitcoin formula, not the blockchain

Even though the subject of Bitcoin regulation is and remains a big issue around the globe, there is probably no other country in the world that lets the Bitcoin community speculate as much as Russia.

For more than a year now, the Russian Ministry of Finance has been speaking out against an alternative currency to the state-issued ruble. Just a few weeks ago, Deputy Finance Minister Alexey Moiseev announced that the Ministry is currently working on a bill to make the exchange of digital currencies into Russian rubles subject to a prison sentence of up to four years.

However, in addition to the statements, the government’s position on the digital currency remains unclear. In an interview with CoinDesk, Moiseev said that Bitcoin and Blockchain technology must be treated differently:

We believe that Bitcoin formula will be very important for different Internet applications in the future

However, Moiseev also pointed out Bitcoin formula risks. By and large, he was somewhat less aggressive than the Treasury itself. “We appreciate the potential of blockchain technology for the e-commerce industry and therefore the technology itself should continue to be allowed and promoted. The handling of Bitcoin formula itself, on the other hand, and viewed as a currency should continue to be viewed critically. Integration into the banking system or exchanging Bitcoin for roubles can be very dangerous”.

Moiseev cited money laundering and terrorist financing as reasons for an urgently needed regulation of Bitcoin. But since Russia is likely to regard the exchange of Bitcoin for roubles as a criminal act, Moiseev sees no danger for the national currency.

Bitcoin and terrorism

Since the first birth of Bitcoin, regulators have been looking for ways to best regulate the digital currency. The state of New York, for example, developed a new legal framework to regulate the digital currency especially for Bitcoin. Most other countries and states in the USA are currently trying to amend current laws and thus make them applicable to Bitcoin.

Many governmental organizations are afraid that Bitcoin could be used by cybercriminals or that it would simplify the financing of terrorist attacks. Especially now, after the attacks in Paris, the authorities are sensitized.

Moiseev also has the topic of terrorist financing on his screen. He says Bitcoin could make the country’s financial system more vulnerable to abuse:

“We are very concerned about current developments, as we have created a good system of protection against money laundering and anti-terror financing in the conventional banking system. We are very concerned that with the legalization of the Bitcoin/Rubel exchange, we could open this window further for criminals”.

But Russia is also observing how other countries are proceeding with Bitcoin’s regulation:

“We are watching exactly how other countries regulate digital currencies and how they deal with the problems of money laundering and terrorist financing,” Moiseev said.