Bitcoin was first introduced in 2009 when Satoshi Nakamoto’s invention became an open-source software. It provides a peer-to-peer transaction system that is managed using a public distributed ledger without the need for a third party. One does not need to wait for the payment to be approved and completed by the mediators such as banks. It is considered a decentralized and virtual currency since there is not central authority or governing body that manages it. Bitcoin’s largest strength is also it’s weakness as countries like Russia are looking to ban the use of Bitcoin in Russia.
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Where credit card payments require the payment of fees by the vendor, Bitcoins require the purchaser to pay the fees. This has led to some criticism by world governments, for they are of the viewpoint that Bitcoins fail to protect customers by refund rights or charge-backs. Furthermore, the perceived amount of anonymity Bitcoin provides scares some governments which believe cryptocurrency to be a threat to their state. It is for reasons like these that the usage of Bitcoins has not made it to all markets as well as all countries.
State of Bitcoin in Russia
For more than a year now, the state of Bitcoin in Russia has been complicated to say the least. Russia’s economic law making body, The Ministry of Finance of the Russian Federation, has been quite vocal in its opposition to the cryptocurrency. Since early 2014 the use of Bitcoins has been largely perceived as illegal and punishable by Russian law.
Several websites related to Bitcoin were blocked in early 2015 by Russia’s media regulator, with a Russian state-owned media outlet reporting that the usage of bitcoin is illegal under Russian federal law. The Bank of Russia also issued a statement in 2014 characterizing it as a banned money substitute.
New Draft Law
Deputy Finance Minister Alexey Moiseev was reported saying last month that the Ministry of Finance of the Russian Federation was working on a new law seeking to punish people converting any type of Cryptocurrency to the Russian Ruble with up to four years in prison.
The draft comes as a reaction to the country’s worries that cryptocurrencies like Bitcoin can aid illegal activities like terrorism, money laundering, etc, for they provide illegal operators a mean to make anonymous payments without leaving any traces. He clarified though, that the Ministry is only against bitcoin and not the entire blockchain.
As a matter of fact, the Ministry realizes how important blockchain technology is for the development of e-commerce. But as for Bitcoin, he was adamant that the implementation of such currency with such a high level of anonymity in the real economy is dangerous.
The final verdict on the state of Bitcoin in Russia is still far from being definitive, the country is actively monitoring how major European countries are handling Bitcoins in order to make a better regarding the state of cryptocurrency in Russia.
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