Russian Ministry of Finance: Blockchain technology is important, but Bitcoin is dangerous

Although the topic of Bitcoin regulation remains divided around the world, perhaps no country is more puzzling than Russia when it comes to digital currency policy issues.

For more than a year, the Russian Federation Ministry of Finance, the country’s economic legislative body, has repeatedly and firmly opposed Bitcoin as an alternative to government currency. Just last month, Russian Deputy Finance Minister Alexey Moiseev told CoinDesk that the agency is studying a draft law that would seek to impose prison sentences of up to four years for users who exchange cryptocurrencies for rubles.

Beyond these statements, however, the agency’s views on Bitcoin as a financial technology have been less clear.

Moiseev recently said that his office is approaching Bitcoin and its underlying technology in a different way, saying:

“We believe that blockchain technology is very important for the development of various Internet-based services.”

Despite this, Moiseev still said bluntly:

“We appreciate the potential relevance of blockchain technology for the development of e-commerce, and therefore, we believe that this technology should be allowed and developed, but if Bitcoin transactions are implemented into the real economy, it would be very dangerous for the real banking system.”

Moiseev also elaborated that the Ministry of Finance believes that the new rules are necessary, citing the digital currency’s connection to money laundering and terrorist financing. In addition, Moiseev also argued that he does not believe that Bitcoin poses a threat to Russia’s national currency.

Bitcoin and Terrorism

Since the advent of Bitcoin, government regulators have been grappling with how to best regulate digital currencies and whether new laws are needed to govern businesses that adopt the technology.

New York, for example, has introduced unique state regulations, although the bill is still in the early stages of exploration when it comes to digital currency regulation, and other major states in the United States are largely trying to update or apply previous regulations to cover this technology.

Among the opinions that various government agencies have expressed on digital currencies, many are concerned that this payment method will be exploited by cyber criminals, and even worry that Bitcoin will be used by terrorists. A recent example is the terrorist attacks in Paris, and a large amount of media coverage has been made of the connection between the two.

The topic of terrorism was also apparently raised by Moiseyev, who said:

“We are very concerned that the measures we have put in place to prevent the traditional banking system from being used for money laundering and financing terrorism will be broken down. We are afraid that allowing free exchange of Bitcoin and the ruble will open that window.”

He then noted that Russia is monitoring how Bitcoin is regulated in Europe and elsewhere.

“We are looking at how bitcoins are regulated, how they are protected to prevent money laundering and potential misuse by terrorists,” he added.

Encryption in Russia

While Moiseev’s comments were somewhat clearer than before, his comments still do not bode well for the fate of digital currency technology in Russia.

In addition, the Russian Central Bank has expressed opposition to banning the use of Bitcoin technology, and the organization's views have also been supported by Russian President Vladimir Putin, who first commented on digital currencies in July this year.

At the time, President Putin supported the Russian central bank’s advocacy of digital currency technology, but also suggested that Bitcoin “is not backed by anything” and therefore may require special regulation.

It is reported that the draft digital currency law drafted by the Russian Ministry of Finance is being reviewed by the Russian Cabinet. This review process is expected to take several months, when it will be submitted to the Russian Parliament for final approval.

Original article: http://www.coindesk.com/russia-ban-bitcoin-not-blockchain/
By Yessi Bello Perez
Compiled by: Satuoxi
Editor: Satuoxi
Source (translation): Babbitt Information (http://www.8btc.com/russia-blockchain)