Russian regulator allows use of Bitcoin for overseas operations

Rage Comment : Russian Finance Ministry officials have finally relaxed their stance on the use of digital currencies such as Bitcoin. Previously, the use of Bitcoin in any form was prohibited. Now, Deputy Finance Minister Alexei Moiseev said that the law will be adjusted accordingly to allow Bitcoin to be used as foreign currency for overseas business, but the use of Bitcoin is still prohibited in the country. This is all because they want to promote the development of blockchain companies and see the disruptive potential of blockchain technology for the country.

Translation: Nicole

Officials from the Russian Ministry of Finance revealed that financial regulators now support changing the bill, although they still decide to ban Bitcoin in the country, but allow it to be used as foreign currency.

In an interview with state-run newspaper Rossiya Szczesny, Deputy Finance Minister Alexei Moiseev said the change of heart was partly due to a desire to limit the use of currencies other than the Russian ruble in the country, as well as to allay concerns about companies using blockchain, the distributed ledger technology underlying bitcoin.

For regulators, the announcement marks a sea change in attitude toward bitcoin, as proposals have long been to ban the digital currency and impose criminal penalties on digital currency users who use bitcoin, despite more supportive comments from the Russian Central Bank.

During the interview, the Ministry of Finance still banned the use of Bitcoin in Russia because that is what the Russian Constitution states, which stipulates that the ruble is the only currency used for state trade.

Moiseev said his agency would adjust the law to allow citizens to use Bitcoin, and that citizens could profit from using Bitcoin in regions where it is legal.

Alexei Moiseev

“Can Russian citizens have Bitcoin wallets? And therefore can use Bitcoin for payments in countries where Bitcoin wallets are allowed? Why not? Therefore, we have created a law in such a way that it allows digital currencies to be used for foreign business, and Russian citizens can sell Bitcoin abroad for profit,” Moiseev said.

Moiseev also clarified that currently, there are no restrictions on the use of blockchain in Russia, and the intention is not to restrict the development of blockchain technology, but to avoid threatening the status of the Russian ruble, the legal currency.

“We must remove the responsibility for issuing bitcoins from data operators to avoid penalties for them,” Moiseev told the news outlet.

He said the revised law could be submitted to the country's lower house of parliament, the Duma, by the end of 2016.