Asian countries are paradoxical when it comes to cryptocurrency. Though most of them are far away from regulating digital currencies, they are actively using it. China has actively rejected Bitcoin’s legality but has continued to boost the currency’s volumes and prices in phases. The Southeast Asian countries account for a good chunk of the global remittance industry. They have begun using Bitcoin for instant cross border transfers which otherwise generally involve high third party charges. Now that Bitcoin transactions are on the rise, Russia has decided to regulate Bitcoin despite previously challenging the digital currency’s legality. Let’s dive deep into why and how Russia is planning to monitor Bitcoin.
Russia and Bitcoin
In recent years, Russia has showcased an alternating personality when it comes to Bitcoin. While at times Russia’s central bank admired the numerous advantages of a cryptocurrencies, they have also been hands off and cynical when it comes to adopting them. In 2014, Russian authorities issued warnings against Bitcoin citing uses like money laundering and financing terrorism before declaring the use of Bitcoin as illegal. They were even considering an outright ban of cryptocurrency in the country punishable by jail time for holding any bitcoins. By May 2016, Russia’s central bank revealed plans to create its own cryptocurrency banning the existing ones. However, the air cleared when a federal tax service letter released in December of the same year implied that cryptocurrencies are not illegal and are yet to be regulated.
Plan to acknowledge Bitcoin
Russian Deputy Finance Minister Alexey Moiseev said that Russia plans to recognize Bitcoin as a legitimate financial instrument in 2018, in order to fight money laundering, as per Bloomberg’s release. The central bank is coordinating with the government over consolidating their position over crytpocurrencies. The need for monitoring Bitcoin and other cryptocurrencies arises from the fact that the traditional monitoring methods won’t suffice for Bitcoin monitoring. The need also stems to the fact that money moved abroad through illegal methods like fake trades and loans has been cut down by nearly half last year and amounted to $771 million.
How Bitcoin is faring in Russia
While it is still unclear whether Bitcoin would be treated as cash or security or commodity, the digital asset’s trading volume has increased over the last couple of weeks. The trading volumes on Local bitcoins alone exceeded 342 Million rubles which is worth roughly $6 Million and is high for a country that has made the cryptocurrency illegal.