Earlier last week, the Russian Ministry of Finance introduced a new law which made bitcoin usage illegal attracting up to 4 months imprisonment. The news caught most of the bitcoin community by surprise and it is definitely going to hamper the growth of bitcoin in the region. Apart from affecting the growth of cryptocurrencies, it will indirectly affect the country’s economy itself.
The new law, making bitcoin usage illegal and punishable has come months after the President of Russian Federation, Vladimir Putin referred to digital currency technology as something the country will definitely explore. Putin’s speech was considered as a positive sign by many bitcoin enthusiasts. However, one of the officials explained that the Ministry of Finance has introduced this harsh law to curb money laundering and illegal transactions. It is now confirmed by the Deputy Finance Minister, Alexey Moiseev himself.
According to a report published by one of the cryptocurrency news sites, the Russian Deputy Finance Minister confirmed that the recent draft law will make bitcoin to fiat a crime and it can attract penalties, imprisonment or both. Alexey Moiseev was quoted saying:
“It’s true that we have developed draft law which provides up to four years in prison for some types of activities which relate to … quasi-currencies. These types of activities are typically related to an exchange of those currencies into the Russian national currency – the ruble. This is the only type of activity which we propose to penalize with criminal sentences.”
On the brighter side, his statement has at least clarified that people can still possess bitcoin and it can be used as money for all practical purposes except for one. As long as the Russians don’t convert bitcoin to ruble, they should be fine.