Russian minister excludes possibility of Bitcoin legalization
Russia’s Minister of Communications and Mass Media says that while blockchain has future in Russia, Bitcoin is not set to gain any legal status.
The cryptocurrency climate in Russia continues to worsen with the latest authoritative statement that underlines the harsh negativism towards virtual currencies coming from Nikolai Nikiforov, Minister of Communications and Mass Media. Mr Nikiforov was quoted by information agency Interfax on Monday as making a rather dull forecast about the future of Bitcoin in Russia.
Mr Nikiforov called Bitcoin “some foreign project based on blockchain”. He said that wheres blockchain technologies will find their application in Russia, Bitcoin is not set to attain any legal status.
His skepticism is in line with a recent warning issued by the Central Bank of Russia in which the regulator noted the high risks associated with the use of crypto currencies and said it is premature to allow any financial instruments linked to crypto currencies to the exchanges and regulated markets or the payment structures of the Russian Federation.
And, in October this year, Sergey Shvetsov, First Deputy Governor of the Bank of Russia, said that the central bank and the prosecutors are working together to close the foreign websites that offer Russian residents to buy cryptocurrencies.
Mr Shvetsov also said that all derivative instruments related to cryptocurrencies are seen as negative phenomena by the “Megaregulator”. The central bank is not supporting these instruments and will implement measures to limit all operations with them for the regulated part of the Russian market, he emphasized. He reiterated that these instruments bring very high risks for the Russian citizens and businesses. Moreover, he noted, Bitcoin has become a means for getting artificially high returns for a very short period of time, something that is characteristic of financial pyramids.
The Russian President has also made clear his stance regarding cryptocurrencies. Last month, Vladimir Putin signed a number of orders to the Central Bank of Russia and the Russian government with regard to fintech and cryptocurrencies.
The Government and the Central Bank have until July 1, 2018 to make sure that certain changes are introduced to the Russian legislation. These changes should determine the status of digital technologies used in the financial segment and should cover the associated concepts, including: distributed ledger technologies, cryptocurrency, token and smart-contracts. These changes should reflect the fact that the Russian ruble will remain the single legal payment means in the Russian Federation.
The legislative changes should cover mining and the way this activity should be taxed. The registration and regulation of the entities executing such activities should also be specified in the legislative changes.