Localbitcoins RUB volume drops due to a bill seeking a Bitcoin ban in Russia

A bill drafted last month is seeking to ban the use of Bitcoin in Russia. The content of the bill proposes a ban on all money surrogates to the Russian Ruble. A Cryptocurrency such as Bitcoin falls in the category of a money surrogate, meaning it’s use will be banned if the bill passes legislation. Any businesses operating a virtual currency business are subject to fines, depending on one’s status the fines increase proportionally:

“fifty thousand to seventy thousand rubles along with confiscation of the administrative violation item for entrepreneurs; eighty thousand to one hundred thousand rubles for officials; two million to three million rubles along with confiscation of the administrative violation item for legal entities.”

On the upside, the European Court of Justice (ECJ) has embraced the concept of digital currencies and ruled Bitcoin a recognized currency in October, 2015. Furthermore, the ECJ decided to exempt cryptocurrency exchanges from VAT taxes. A VAT or Value Added Tax ranges between 15-17% and is added on goods and services in the European Union. Exempting exchanges from such a hefty tax shows ECJ’s support for cryptocurrencies and blockchain technology.

Localbitcoins is the number one peer to peer bitcoin exchange available. It is similar to Craigslist in the sense of posting ads and searching listings. Since localbitcoins is a peer to peer exchange, it’s trading data for each currency can give us a clearer picture to bitcoin’s adoption in the corresponding nation.

The chart below shows the volume of bitcoins traded on the platform for the selected currency. By default the chart shows the data for RUB but you can select USD, EUR, and GBP to compare volumes. What you will notice is how the trade volume for the Russian Ruble has dropped significantly since the end of December. Coincidentally the Bill seeking a Bitcoin ban in Russia was drafted on December 18th, which is the same date that bitcoin’s 4 month long bull market ended. Looking at the other currencies’ data, we can see a general decrease in trading volume but non as drastic as the RUB. Is Bitcoin’s recent price drop not only due to Mike Hearn’s departure but also due to the draconian bill? The data below should help answer that question.

Tell us whether you think the bill will pass legislation and will come into action in Russia? How bad do you think it will affect Bitcoin’s price if at all?

If you liked this article follow us on twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.