Bank of Russia develops national virtual currency

Maria Nikolova

In the face of the skeptical comments made by Bank of Russia’s Governor Elvira Nabiullina regarding Bitcoin’s future in Russia, the “Megaregulator” has already started work on the creation of a national virtual currency.

After yesterday’s rather skeptical statement by Bank of Russia’s Governor Elvira Nabiullina about the future of Bitcoin in Russia, today’s news on the crypto-currency front is more positive. The Bank of Russia has started work on the creation of a national virtual currency, Olga Skorobogatova, Deputy Governor at the central bank said today, according to a report by information agency RIA Novosti.

“We’ll definitely make it to the point of having a national virtual currency”, Ms Skorobogatova was quoted as saying. “It is a question of time”, she added.

Last week, Ms Skorobogatova said the regulator was planning to to tax bitcoin as a digital asset. The central bank is poised to present the relevant legislative documents in a month.

Unlike Ms Skorobogatova, Bank of Russia’s Governor Elvira Nabiullina was less enthusiastic in her comments regarding crypto-currencies in Russia. On Thursday, she said there was no time frame on any potential authorization of Bitcoin and that the bank sees many risks associated with this “asset”. Ms Nabiullina noted that the regulator has its doubts about Bitcoin and that it does not see substantial benefits from introducing digital assets in the Russian economy.

The debate around the future of Bitcoin and blockchain technologies in Russia has been heated lately. In April this year, Russia’s Deputy Finance Minister Alexey Moiseev said Russia could recognize crypto-currencies as legal in 2018. His optimistic statement, however, was followed by that of Maxim Grigoriev, Chief of the Centre for Financial Technologies at the Bank of Russia, who said talk of any legalization of crypto-currencies in Russia was premature.

On January 27, 2014, the Bank of Russia published an announcement entitled “On the use of virtual currencies, and Bitcoin, in particular, when conducting transactions”. In the document, the regulator warned the public against using virtual currencies for exchange purposes. The bank referred to Article 27 of the law “On the Central Bank of the Russian Federation”, which prohibits the issue of money surrogates in the Russian Federation. The regulator stated that the provision of virtual currency exchange services by business entities will be treated as involvement in suspicious activities. These actions are interpreted as violations of the laws on anti-money laundering and terrorism funding.

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