Russia is considering banning the use of virtual currencies such as Bitcoin, and the new laws may be ready by next spring.
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 are bothering regulators. They believe that makes currencies such as Bitcoins perfect for illegal transactions, ranging from funding terrorism, purchases of illicit goods to money laundering. Off course this could spark another debate since traditional currencies have already been used to finance terrorism, but it seems the Russian government is trying to apply a heavy hand to the ones involved with virtual currencies, yet another ambivalence in relation to the fact that companies such as Qiwi or webmoney and others are also using a certain kind of “digital currency”.
Government officials say that they will open criminal proceedings against those who mine digital currency, and also against those who use them for transaction, while asking regulators to ban access to exchanges and online stores that accept Bitcoin.
Aleksey Moiseev, the Deputy Finance Minister states that what Russian lawmakers want is to allow people to use their crypto currencies as they please, but they can’t use these “surrogate currencies as tender”.
Aleksey Moiseev commented:
“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.”
Furthermore, the crypto currencies are also quite volatile as they have immense fluctuations wildly due to the fact that they aren’t actually backed by any assets. This makes 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, competing with the price for the ounce of gold, but now it has dropped to $478. Russia authorities consider Bitcoin too much instable because it carries a huge volatility. Its decentralized nature puts it out of governmental control and the Russian authorities consider this to be a serious threat.
Several months ago, the Russian Central Bank had already taken the time to warn people of the dangers of virtual currencies that are not under its control. Several other countries have taken similar actions on the matter, while others have embraced it without while being confident in its potential.
The notion that virtual currencies are being used to support terrorism is likely true, but so is Fiat currency; that doesn’t make Bitcoin the root of this trouble. 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. Despite this, Russian authorities should revaluate its position on digital currencies because Bitcoin could also be the way by which the Russian government could go around international embargoes.
The real issue is here is that the Russian government seriously opposes to the bitcoin decentralization aspect of digital currencies and most likely the fact that no government has control over the currency, allowing people freedom like never before.
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