Russian authorities abandon Bitcoin ban, but further regulatory measures are still under discussion

Russia's attitude towards Bitcoin has been wavering, which has confused Bitcoin enthusiasts. One moment, it said it would ban the use of Bitcoin and put anyone suspected of participating in transactions in jail; the next moment, it encouraged people to use Bitcoin freely. Recently, Russian Deputy Finance Minister Alexei Moiseyev said in an interview that the Bitcoin ban has not come as promised. In other words, Russia encourages Bitcoin to take root and people can use it freely.

Bitcoin ban ‘not the right option’

Although the Bitcoin ban has expired, Bitcoin mining is still a big problem in Russia. This is because the mining process generates new coins, which is prohibited by Russian law. The Ministry of Finance must ensure that the Central Bank of Russia is the only banking system in the country that has the right to issue currency. However, apart from mining, Bitcoin users seem to have no problem trading virtual currencies both domestically and abroad.

Moiseyev said in the interview:

The details of the Bitcoin ban are already very complete, but we will not publish them immediately, and the content of the bill is likely to change. Now I have to go to a meeting with experts and carefully consider the next steps. At present, I can only say that given the development of technology, banning Bitcoin directly is not the right choice.

There is intelligence that Bitcoin is mostly used for illegal activities, but no specific details are provided. Russian officials said they would re-verify the authenticity of the intelligence. Moiseyev said that the intelligence came from Europe. However, the problem is not serious enough to completely ban the use of Bitcoin in Russia, so there is a contradiction. The intelligence may refer to the illegal use of digital currencies in the dark web or deep web.

We must stop criminals from using Bitcoin for illegal transactions and money laundering. We can see from some official information provided by Europe that nearly 80% of suspicious transactions are related to illegal activities such as money laundering, and are all carried out through Bitcoin.

However, in recent weeks, Russians have shown increasing interest in Bitcoin. In early August, Bitcoin purchases on LocalBitcoins.com reached an all-time high. The Russian government has also said it will use Bitcoin blockchain technology for settlements in the future.

Moiseyev said:

Of course, we will not forget that terrorist financing is the main use of Bitcoin. We will ensure that the central bank is the only currency issuing center. However, if you want to use Bitcoin for anything else (besides issuing currency), you are free to do so.

In September 2015, German Gref, a senior executive of the Russian Federal Savings Bank (Sberbank), publicly expressed his opposition to the ban on cryptocurrencies. He said that he himself holds some Bitcoin, and as an expert in this field, he believes that Bitcoin must not be banned.