Russia Considers Defining Bitcoin As a Foreign Currency

News and Analysis

According to Alexei Moiseeev, Russia’s Deputy Finance Minister, the authorities are drafting a new law that would bring bitcoin and other cryptocurrencies under definition of foreign currency.

The Ministry is planning to prohibit the issuance of Bitcoin in the country while allowing purchasing cryptocurrencies in order to be used or sold abroad. Yet mining Bitcoin or other cryptocurrencies would equal to issuing a currency and banned as such.

“Our goal is to expel circulation of circulation in Russia. Ruble is the only currency according to the Constitution which makes issuance of any other currency illegal,” said Moiseeev.

However, says Moiseeev, you can a foreign currency, put it in your pocket and leave the country.

“That’s why we are working on modifying the draft law to make it possible purchasing cryptocurrencies in order to use them outside Russia, as well as selling them outside Russia for profit.”

In a somewhat weird definition Moiseeev calls Bitcoin a ‘by-product’ of the blockchain technology, and mining cryptocurrencies with its help will be an exemption from criminal liability.

“The way blockchain works, Bitcoin comes out as its by-product. Therefore we have to exempt operators’ liability for such instances so that they are not exposed to any risk of being punished”, he added.

Earlier this year Russian Ministry of Finance tightened its proposed penalties for the issuance of so-called ‘money surrogates’ including digital currencies. According to individuals who issue money surrogates would face as many as four years in prison, while executives with financial firms that release their own money surrogates could be imprisoned for as many as seven years and be restricted from holding similar positions in the future.

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