Russia Postpones Consideration of Bitcoin Banning Bill until Late 2016

News and Analysis

Russian ministry of finance in cooperation with other departments is preparing yet another revision of a bill banning issuance and turnover of Bitcoin in Russia. Now, the document is expected to be submitted to the Parliament by the end of 2016, as opposed to earlier schedule suggesting the bill will be reviewed as early as this June.

Deputy minister for finance of Russia Alexey Moiseev stated:

“The last thing we want to do is to issue laws leaving scammers alone, but causing trouble to honest people. So we won’t be hurrying the introduction [of the bill] and think twice. I suspect the last definition in the law might be inefficient in a way, so we decided to use summertime to determine what to introduce to the government, and then to the Duma, by the end of the summer.”

According to Moiseev, current revision of the bill does not take into account the overall compexity of issuing Bitcoin, which creates risks for honest market players.

This March, Russian ministry of finance proposed to introduce a punishment of seven-year-long imprisonment for issuance of money surrogates, including cryptocurrencies. Back in September 2015, the ministry considered 2 years of imprisonment (in case of a collective crime), or a penalty fee of 500,000 rubles. The first edition of the same draft law from 2014 provided for administrative responsibility only, and involved no imprisonment.

Last month, Alexander Bastrykin, Head of Russian Investigative Committee, claimed that cryptocurrencies may supersede real money from the market. He wrote about that in his major article on ‘hybrid war’ he believes the US wages against Russia.

However, Andrey Lugovoy, deputy chairman of the Russian parliament’s committee on security and anti-corruption stated he stands against complete ban of cryptocurrencies in Russia, as the country’s ministry of finance and investigative committee demands. In late April, Pavel Livadny, deputy director of Federal Financial Monitoring Service of Russia, Rosfinmonitoring, suggested that the bill implying ban of cryptocurrency in Russia will have to be revised.

Recently, it was reported that Russian officials are discussing introduction of a national cryptocurrency. The idea is circulateing across the Ministry of Finance and the Central Bank, with representatives of several private banks involved. As the reports suggest, bitcoin’s issuance and exchange procedures will be regulated, issuers licensed, and anonymity minimized. The idea’s originators believe such approach would safeguard the project from being used in illicit schemes, protect law-obedient consumers, and cut transaction costs.

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