Russia Deputy FM Claims Bitcoin Payments may be Banned
When it comes to Russian regulation of Bitcoin, it is indeed a one of the most uncertain. Every week brings a new story about the potential regulations that are being considered by the numerous state agencies.
Today, Russia's deputy finance minister Alexey Moiseev made the statement that he sees cryptocurrency payments eventually being outlawed in the country. This is not the first time he has made similar comments. A few weeks ago he wanted to ban cryptocurrencies from retail investors.
Yet, these comments appear to have been in direct contradiction to the finance minister who said that he sees no point in banning cryptocurrencies. Moreover, there was great hope that Russia would be one of the few countries that would embrace cryptocurrencies. Vladimir Putin met with Vitalik Buterin of Ethereum recently and there were also rumours that the country could issue Crypto-Rubles.
Indeed it does not seem that even the Deputy Finance minister appears to contradict himself. For example, earlier in the year he claimed that Bitcoin needs to be classified as an asset. Yet now he is taking the view that this "asset" should not be used as a way to make any transactions at all? However, as long as you are a "sophisticated" investor then you can speculate on the price of Bitcoin.
Although these comments may be off-putting to the many Russians who use Bitcoin on a daily basis, they should not be considered as anything definite. There are numerous discussions which are ongoing as to the future of Bitcoin. For example, there are a number of large companies that could be considering Bitcoin as a method of payment on their sites. If Russia were to ban these payments it could be net negative for the country.
An even more puzzling contradiction appears to be Mr Moiseev's support for the many Initial Coin Offerings (ICOs) that are raising funds globally. This is one area in the cryptocurrency scene that does appear to be attracting global scrutiny from China to Japan and South Korea. Although ICOs are an efficient way for companies to raise financing, they can also take advantage of less sophisticated investors who do not do the full due diligence on their investments.
At the moment, the Deputy FM wants to have a bill drafted that would be ready by the end of October. Just how a group of regulators will lay out defined rules for regulating a decentralised currency is not clear. These are no doubt ambitious targets and we will wait to see if this announcement by Mr Moiseev is just more of the FUD.
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Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.