No, there is no Kenny Rogers soundtrack to this article, since Russia has let down Bitcoin enthusiasts in Russia once again. Russia has officially created new laws designed to curtail Bitcoin use nationwide, much to the chagrin of free market economists throughout the region. Coinivore updates you on the state of Bitcoin in Russia today, and the strange political journey the digital currency has endured over the last two years.
Russia lays the hammer and the sickle down on Bitcoin
As reported on Friday by Russian economic blog Interfax, The Ministry of Finance, has termed Bitcoin “a money substitute”, and has created the following punishments for its use. Manufacture of Bitcoin, or “mining”, distribution of the currency, or acquisition with intent to distribute (sounds like drug trafficking) is punishable with fines up to 300k Rubles, which is equivalent to about $4500 USD.
Other penalty options include loss of one year’s worth of salary or income, compulsory works of up to 360 hours or one year of “correctional labor”. That applies to individuals. A group or company may receive fines up to 500k Rubles (about $7500 USD) for a first offense or salary/income of two years. Compulsory works penalties rise to 480 hours, or two years “correctional labor”.
The laws governing “Information, information technologies and information protection” will be amended will be amended to also attack Bitcoin site use within Russia’s borders. Websites that deal with Bitcoin sales and general information will be limited by . The sites that have been banned or shut-off by Russian authorities in the past include Bitcoin.it (a wiki-encyclopedia dedicated to Bitcoin), Btcsec.com (an online Russian BTC community), Coinspot.io (an online Russian BTC community), Indacoin.com (a Bitcoin exchange), hasbitcoin.ru and bitcoinconf.ru. The threat of money laundering and the ability to move the nation’s capital out of Russia easily seems to be the main offenses of Bitcoin.
It has been an uphill battle for Bitcoin in Russia for over a year. Dating back to the summer of 2014, Russian plans to ban the currency outright were first brought to light. Deputy Finance Minister Aleksey Moiseev discussed the intent to regulate Bitcoin out of Russia last September with the media journalists in Moscow.
“We will discuss this (upcoming digital currency 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.”
Putin said something almost positive about Bitcoin
Strangely, the tide against Bitcoin seemed to be turning as recently as two months ago. Russian leader Vladimir Putin has made some comments about Bitcoin. Underscoring a lack of understanding of the currency, stating that “They are useless”, also saying “As an accounting unit, these ‘coins’ or whatever are they called, they can be used, and their adoption becomes wider and wider. As some kind of unit in some account, probably, it’s possible. We do not reject anything, but there are serious, really fundamental issues related to its wider usage, at least, today.”
In may of this year, a major legal court victory was won in favor of Bitcoin companies and websites within the Russian Urals. Nevyansk Town Court, a small area of about 25,000 in Northern Russia, ruled to ban Bitcoin-related sites. The Roskomnadzor, the Russian national website regulator, similar to the American FCC, ran with that ruling, implementing a ban on Bitcoin websites, nationally. In appeal fielded by the websites affected, the Russian Sverdlovsk Oblast Court has overturned the Nevyansk Town Court order blocking websites containing crypto-currency-related information. It now appears that victory’s effects will be short-lived.
Recently, Russian finance company Qiwi has planned to create a privately-held digital “BitRuble” for mass distribution in the country. This was met with disdain by the Russian Ombudsman, Pavel Medvedev.
“It’s absolutely illegal, such technical hooliganism absolutely inappropriate. The Constitution says who has the right to Russia to issue money; it is the (Russian) central bank. The only currency in Russia is the ruble. The rest of the money is illegal, and this kind of disgrace (would be) a criminal offense.”
In another twist, Deputy Chairman of the Bank of Russia Olga Skorobogatov told RIA that Russia is studying what digital currencies and Bitcoin’s Blockchain technology can do. Qiwi will not be apart of this state-run initiative.
“We even created a working group and dive into this topic. We have only just begun. This is very interesting, even the banks themselves are passionate about. We have, indeed, studying the possibilities and uses of technology. We need to understand how to use it in real life“
It will be interesting to see to what extent Russia will work to oppress Russians in their interest in Bitcoin, now that Pandora’s Box has been opened already. Will they try to monitor and regulate the Bitcoin blockchain and its transactions? If someone uses a Bitcoin app on a smartphone in Russia, to buy or transact in Bitcoin, can that be stopped by the government? Can someone with a good VPN service circumvent these new regulations from home?
How far will the tyranny of the Russia state go to oppress its own people? Only time will tell, but what may form is an elaborate digital black market, just like with any drug, commodity or product demanded by a segment of the population. Russian mega-bank Sberbank CEO German Gref even admitted he owns “a small amount of Bitcoins”, which means he owns a whole lot of Bitcoins, at Russia’s Finnopolis 2015 economic conference. Will people choose “The Future of Money” over the national state of online oppression? Only time will tell.
Russia now joins the ranks of Bangladesh, Bolivia, Iceland, Ecuador and Vietnam in banning digital currency.
Russia is smart. Russia sees bit-CON for what it really is: a fake, a fraud, a fad, and a scam.
Comments are closed.