Russia and Bitcoin will, most likely, never get along, and there is nothing wrong with that. Any self-respecting country in the world is keeping an open mind towards Fintech and digital currency, which is not on the agenda for Russian officials just yet. What is worrying, however, is the new legislative draft which makes Bitcoin illegal in the country, as well as aims to punish digital currency companies even harder than before.
Enforcing Stricter Penalties For Bitcoin usage
Although it is up to government officials of every individual country to deem Bitcoin legal or not, there are very few regions where digital currency is officially considered illegal. Russia will soon be added to the list, though, as the Ministry of Finance has proposed a new draft that will officially label Bitcoin as illegal.
But that is not all the Ministry plans to do, as the draft includes various proposals to impose new penalties on companies dealing with digital currency. A fine between three and five million Ruble will be imposed upon companies, although there is an alternative punishment in the form of a 90-day clause during which business operations are prohibited.
Business owners – especially those working in the banking, insurance, and other financial sectors – dealing with Bitcoin in some form can face a jail sentence of up to seven years. Moreover, they would be prohibited from securing particular jobs in the financial world for the next three years.
As far as Russian government officials are concerned, the Ruble is the only legal currency to be used in the country. Moreover, the Central Bank is the only legal entity allowed to issue currency in the country, regardless of whether this money comes in paper or electronic form. Any monetary substitute will be classified as illegal in Russia, and Bitcoin would certainly fall into that category.
Whether or not this draft will affect the progress made by the Qiwi team remains unknown at this point. Although the developers of BitRuble are working closely with the Russian Central Bank and other government officials, Qiwi would actually create a new form of money in the country, regardless of how it can be controlled.
Any monetary substitution is associated with high risks in Russia, as there is no legal entity overseeing or managing valuta other than the Ruble There is a tremendous concern regarding the usage of digital currency in money laundering schemes and terrorist funding, although none of these allegations have ever been proven.
Furthermore, Russia is a firm believer in sticking to paper and coins as far as monetary transactions go, rather than changing to more electronic means. While various countries are trying to get rid of cash altogether, Russia seems to be taking a more cautious approach.
At the same time, this decision is in stark contrast to what the European Union is doing with Bitcoin, as officials declared the digital currency a monetary “replacement.” However, the EU also admitted Bitcoin holds a lot of potential, and how the concept should not be ignored.
Keeping in mind how various countries are actively looking to issue their digital currency shortly, the legislative proposal by Russian officials could end up being nothing more than just that in the long run. The future of Bitcoin might be uncertain in some countries, but keeping an open mind towards this concept and its underpinning technology seems to be the right decision.
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