Russia plans own cryptocurrency, would ban bitcoin

Russia plans own cryptocurrency, would ban bitcoin

Bitcoin

Russia is planning the introduction of its own national cryptocurrency and the banning of bitcoin and all other existing ones, reports the Russian business daily Kommersant.

According to sources of the media from the Federal service for financial monitoring (Rosfinmonitoring), the cryptocurrency will be tightly regulated, its issuers – licensed, exchanging – subject to rules and anonymous payments with it – next to impossible. The new currency would probably lower the cost of financial transactions and provide better protection of the diligent consumes. Russia is also planning to ban the use of all other existing cryptocurrencies because they may be used for financing of terrorism, other criminal activities and money laundering.

Currently Rosfinmonitoring is conducting consultations with Russia’s central bank, the finance ministry, representatives of the banks in the country and other interested parties, but there is no draft legal framework yet, nor a comment from the Bank of Russia.

The eventual national cryptocurrency will not be “mined” by anonymous computers across the world, like the currently existing cryptocurrencies, but will rather have a licensed issuer with responsibilities and rights. Exchanging rubles or other currencies into the Russian digital currency will be done at “designated electronic platforms” under tight rules, mostly focusing on the identification of the clients.

According to Kommersant’s sources, the introduction of the new cryptocurrency will most likely coincide with banning the use of the anonymous cryptocurrencies in the country. This is not a new idea – a draft law in this regard has been published last year on Russia’s platform regulation.gov.ru and representatives of Bank of Russia have openly spoken against the cryptocurrencies and the “surrogates”. At the same time, however, the central bank is looking into the blockchain, the distributed ledger technology underlying the bitcoin, as means to develop new financial transaction systems.

The idea for banning the use of “foreign” cryptocurrencies has been received with mixed feelings by Russia’s financial sector. Alexandr Galitskiy from Almaz Capital Partners told Kommersant that bans are generally a bad idea in terms of international cooperation and urged for the adoption of the existing technologies, rather than banning them. On another hand, Evgeniy Korchago, a lawyer, noted that the cryptocurrencies in Russia are totally unregulated. “If you pay for something in cryptocurrency and you are defrauded, there is no one to complain to. Not a single court in the country will hear your case,” Korchago said and added that the introduction of a regulated national cryptocurrency would be useful for all.

At the same time while Russia is trying to ban the use of bitcoin and isolate itself, Japan is making steps towards legalizing the cryptocurrencies as “regular” means for payment.

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