Bitcoin Regulation

Russia: Holding Bitcoin is Okay, But Using and Mining It Isn’t

Emilio Janus | Jun 10, 2019 | 05:00

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The Duma (parliament) representative in Russia may finally have given some clarity on cryptocurrencies, albeit inadvertently. While announcing potential fines for miners, it stated that owning bitcoin was possible.

The revelation came during the St. Petersburg International Economic Forum, during an interview with Anatoly Aksakov, Chairman of the State Duma Committee on Financial Markets.

Anybody Caught Mining Bitcoin Will Be Fined

Aksakov told press at the event that:

…actions with cryptocurrency, unconditional due to Russian legislation, will be considered illegitimate. This means that mining, organizing production, circulation, creating exchange points for these tools will be prohibited.

The punishment for such actions would be a fine. But this proposal would only apply to open blockchains (Such as Bitcoin and Ethereum), not any state-backed Crypto-Ruble.

So far, so what… Russian has been threatening this ban and regulation virtually every month for years. But Aksakov went on to say something infinitely more interesting.

But Owning It Is Just Fine

Despite the proposed ban on mining and other activities, he stressed that owning bitcoin is still allowed. That is, as long as it was acquired under foreign law at foreign points of sale and exchange. Obviously, any Russian point of sale or exchange would be illegitimate, in the same way as mining.

Furthermore, Aksakov professed a belief that technologies such as Lightning Network, which improve the speed of transactions, will spark renewed interest.

A critical mass of actions and operations are now accumulating, which will allow Bitcoin to become popular again.

Well, that’s sure to upset, Russia’s central bank chief, Elvira Nabiullina. Last October, she was celebrating how ‘fortunate’ it was that the cryptocurrency craze was fading away.

The central banker was also at the economic forum last week, telling the Duma that she is against legalization of cryptocurrencies. So is the government’s position really so far away from the central bank’s?

Perhaps not. Nabiullina did state that the bank was, “against the legalization of cryptocurrency specifically as a means of payment.” One assumes this would also fall under circulation and creating exchange points, hence be an illegitimate action.

So You Can Own And Hodl, But Not Buy, Sell Or Use

Despite seemingly never-ending delays to the legislation, Aksakov claimed that it would pass in June, before the end of the spring session. President Putin set this deadline back in February, so it’s in everyone’s best interests that it is achieved.

So is the end finally in sight for clarity on cryptocurrency’s legality in Russia? From what Aksakov says, it seems like clarity is already there. It just needs passing into law.

Which is bad news if you opened a massive crypto-mining operation last year.

Will Russia end up ‘banning’ cryptocurrencies? Add your thoughts below!

Images via Shutterstock