Is Russia Set to Ban Cryptocurrency Payments?

In an unsurprising turn of events, Russia’s central bank has announced it would now support the ban on cryptocurrency payments. Still, Russia is interested in a unified digital currency.

29 November 2019 | AtoZMarkets – Russia’s love-hate relationship with cryptocurrency took another twist today when the Central Bank of the Russian Federation announced it would now support proposals to ban payments in cryptocurrencies.

Bank of Russia backs a potential ban on cryptocurrency payments

According to a report released by a local Russian media outlet, the Central Bank of the Russian Federation supports the idea to prohibit payments made using cryptocurrencies, if it follows appropriate legislation. 

As per the report, the central bank has claimed that its support to ban crypto payments stems from their belief that digital currencies carry significant risks. The central bank added:

“The ruble is the only legal tender in the Russian Federation. We continue to believe that cryptocurrencies carry significant risks, including in the field of laundering of proceeds from crime and financing of terrorism, as well as in conducting exchange transactions due to sharp exchange rate fluctuations.”

The report claims that the Russian crypto community is getting prepared for a potential tightening of restrictions, with rumors allegedly flying that offenders would be sentenced to 5–8 years in prison. Due to the difficulties of enforcement, some industry representatives reportedly believe the ban on cryptocurrency payments will be limited to a series of “demonstration cases” intended to dissuade the public from flouting the law.

Russia’s stance on cryptocurrencies

This, however, isn’t Russia’s first entanglement with digital currencies. In October 2017, President Vladimir Putin claimed that cryptocurrencies “cause serious risk” and are used for crime. In May 2018, the cryptocurrency bill — titled “On Digital Financial Assets” (DFA) — was passed by the Russian parliament but was soon sent back to the first reading stage due to the lack of definitions for key concepts, such as crypto mining, cryptocurrencies and tokens.

As AtoZMarkets reported, the BRICs nations, including Russia have shown some interest toward a single digital currency.

Nevertheless, Bitcoin price has been bearish throughout November. The flagship cryptocurrency has been responding to worldwide apathy and a near-constant stream of reports about crime and exchange hacks. This negative backdrop has most probably prompted the Governor of Russia’s Central Bank, Elvira Nabiullinato suggest cryptocurrency is akin to gambling in a casino.

“In our opinion, private cryptocurrencies cannot be equated with fiat money and cannot be legal tender,” she added.

“If it is decided to ban cryptocurrencies as a means of payment at the legislative level, we consider it appropriate to support this position.”

In October, she said, “There is worldly wisdom that free cheese is only in a mousetrap: easily earned money quickly leaves.”

What do you think about the proposed ban on cryptocurrency payments in Russia? Let us know what you think in the comments section below.

Share Your Opinion, Write a Comment