Russia is planning to punish users of cryptocurrencies such as bitcoin, saying anonymous, difficult-to-trace transactions help kidnappers and money launderers.
The Finance Ministry in Moscow plans to submit legislation this month that would punish those who use digital currencies with fines as high as $38,000 and jail sentences of up to seven years. As opponents criticize such regulations as futile in the face of the growing popularity of bitcoin, Russia joins countries including Bolivia, Iceland and Vietnam in taking steps to criminalize it.
Russia has struggled since the fall of the Soviet Union to build confidence in the ruble and curb the once-common practice of Russians demanding payment in U.S. dollars and other foreign currencies. A decade ago, the government dropped capital controls limiting cash outflows, and in 2014, the Bank of Russia began to allow the ruble’s value to be set almost entirely by the market. Last year, the central bank revoked the licenses of 34 lenders for reasons such as violations of the laws prohibiting money laundering or financing terrorism.
The Finance Ministry’s proposal would prohibit the issuance of all cryptocurrencies or their use in exchange for goods