Russia Says “No” to Crypto
The country – continuing its love-hate relationship with digital currency – has warned that its pending bill seeking to ban crypto activity within the country’s borders stems from the ongoing panic caused by the coronavirus pandemic. Regulators say that now, more than ever, bitcoin and its altcoin cousins are showing their volatility to be extremely dangerous, and that it’s simply not safe to allow operations surrounding crypto in the coming future.
Alexey Guznov – the legal head of Russia’s central bank – explained in a statement:
We believe there are big risks of legalizing the operations with the cryptocurrencies, from the standpoint of financial stability, money laundering prevention and consumer protection. We are opposed to the fact that there are institutions that organize the release of cryptocurrency and facilitate its circulation.
Guznov clarifies that the bill isn’t looking to make the ownership of crypto illegal. Granted people purchase cryptocurrencies from out of state or in a jurisdiction where there is no ban in place, they will be allowed to keep the assets they earn. However, Russian cryptocurrency exchanges and assorted digital businesses are likely going to have trouble meandering their way past the present law, which could be passed as early as this spring.
Nobody is going to ban owning cryptocurrencies if they made their deal in a jurisdiction that does not prohibit that.
In addition, those that purchased, traded or sold bitcoin in Russia prior the instillation of the new statute will not face punishment.
Alex Kuptsikevich – senior financial analyst at FX Pro – comments that Russia was likely waiting for the crypto fad to dissipate, though at the time of writing, it doesn’t look like that’s going to happen, and crypto is looking to stay for a while. He states that Russian lawmakers didn’t see this coming and have been putting the ban off hoping things would fix themselves. He says:
Representatives of Russia’s central bank have repeatedly voiced their view: the ruble, as the law says, is the only legal means of payment in Russia. Attempts to define them with a status of ‘digital financial assets’ took so long because lawmakers were hoping that the crypto boom would fade away, and they wouldn’t need to create a new legal environment.
A Lot of People Will Be Disappointed
The bill is coming at a difficult time. Right as bitcoin is beginning to show signs of life yet again, many crypto enthusiasts are likely thinking of jumping back into the digital asset market, but those in Russia are sadly going to face opposition in the coming months.
The new law is similar with those enforced by countries like China and South Korea, which have instilled bans against initial coin offerings (ICOs) and additional crypto-related activities.