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Bitcoin and Russia have been in a troubled relationship for a long time now. There have been all kinds of reports on the country’s bitcoin scenario being published across various magazines. The recent reports state that Russia has yet again blocked bitcoin websites, in spite of a court ruling against it. However, it is the perspective that shapes a story and each story has two sides.
To start with, in the current geo-political scenario, it is hard to stay objective while reporting things on mainstream media (now that internet and news websites belong to that category). There are numerous questions that needs to be addressed
Why does not Russia accept bitcoin as a currency?
Russia is not the only country that does not recognize bitcoin as a valid currency. Many countries across the world do not consider bitcoin to be a valid currency. It is treated more like a commodity than a currency. In other words, whoever sells, buys, pays with or receive payments in bitcoin is doing it at their own risk. It is the same in many places.
Russia is opposed to digital currency
According to the recent statement by Vladimir Putin, the Russian president — the government does not recognize bitcoin as an alternative currency, however the country is open to explore, innovate and use the technology behind bitcoin or something similar to create its own digital legal tender. To support the argument, Ecuador introduced its own digital currency last year. Soon, everyone in Ecuador will be able to make transactions using digital currency similar to that of bitcoin. At the same time, bitcoin is illegal in Ecuador.
READ MORE: Ecuador Issues Mandate to Accommodate Its Digital Currency
Russia does not want financial innovation, and it will harm the nation
Yes, limiting access to bitcoin and technology will stifle financial innovation, and it is something that all nations should think through, even the United States. BitLicense in New York State is doing everything it can to keep bitcoin and related companies from operating in the state. It can also be considered as a move to stifle financial innovation. Other countries can take Canada as an example when it comes to bitcoin regulations, in order to ensure unhindered innovation in fintech sector.
READ MORE: BitLicense Fiasco — NY Loses 2 More Bitcoin Companies
Russia does not want to disturb its precious ecosystem bubble by allowing bitcoin to thrive
Every action has consequences, same with bitcoin regulations. Bitcoin transactions is a two way street. It allows outflow as well as inflow of funds. The current situation in Russia calls for strict economic controls in order to ensure the stability of its economy. The country is currently hit with sanctions. There are restrictions on flow of commodities as well as currencies across borders. The country has to prevent excess outflow of funds to maintain liquidity in the country. Otherwise, the economy may potentially crash, causing a repeat of the Greek fiasco, unless the geopolitical situation improves.
However, controlling bitcoin in these conditions also prevent inflow of funds, which otherwise can strengthen the economy. It is a judgement call, either risk the downfall with hopes of strengthening the economy, or protect what is left while missing potential gains.
All these justifications apart, the decision to control bitcoin usage in Russia is a loss for the bitcoin industry and the community itself.
Disclaimer: The opinions expressed herein are those of the author and do not necessarily reflect the views of Live Bitcoin News