Putin’s Internet Adviser Says Accepting Bitcoin is a Crime

News and Analysis

In his recent interview with Lenta.ru German Klimenko, Vladimir Putin’s internet advider assigned to the position by the Russian president in early 2016, said that accepting bitcoin should be deemed an act of crime.

“Bitcoin is not the first one, there are other settlement means. Accepting bitcoin as a payment for anything is inacceptable because it is a crime. Just because payments within the Russian Federation are accepted in rubles. Any introduction of an outside currency into the balance is always an independence on whether its counterfeit or not, it’s always a blow on economy. Because no state in the world, while watching it in homepathic doses with pleasure, but when it becomes critical, everyone will certainly ban it,” he said.

Meduza.io, an exile Russian publication, has also quoted Klimenko’s views on cryptocurrencies:

“No alternate plans like bitcoin are acceptable. One shouldn’t forget that classical signs of a sovereign state is borders and money in the first place. As soon as a state lets in some monies issued by no one knows who, this practice ceases being a financing tool and becomes coinage offence.”

In his other statements he told journalists that Google and Facebook might be blocked in Russia since they “do not cooperate with law enforcements”. Speaking about a messenger app Telegram and its focus on user communication privacy, Klimenko said that “Telegram will either comply, or be closed.”

The messenger’s creator, Pavel Durov, however, said in his reply that interference of law enforcement in personal communications will result in emergence of black market for data, adding that Telegram “will not disclose personal data or encryption keys to third parties.”

However, when speaking about bitcoin’s underlying technology, the blockchain, Klimenko told Lenta.ru:

“The technology, by the way, is amazingly interesting. […] When bitcoins emerge, if we consider them technically, no corruption schemes will be possible. […] You cannot trace the way a 5,000 rubles bank note has made, but with the blockchain technology every note and every ruble will have a marking, and you’ll always be able to look up the history and find out what came whence. It’s the most transparent currency, generally, and its implementation will mostly result in solving all tax problems. All states, I believe, are cautious as nobody can calculate the sequences.”

“I expect lots of experiments with the blockchain technology. They’ll attempt various issuances and novelties at different exchange. They’ll be watching, as replacing software right away is shifting to a completely different reality. We cannot even imagine how different it will be. When every rouble has a recorded owner, it will become a truly different world,” he added.

Klimenko’s statements as to willingness of different countries to restrict or ban cryptocurrencies, however, contradict with the recently published report by the British Commonwealth’s Working group on Virtual Currencies. In particular, the report read:

“Any regulatory and legislative frameworks should focus on interactions with fiat currencies and avoid attempting to regulate the underlying decentralised ledger technology. Such frameworks should be technologically neutral and avoid stifling innovation.”

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