2016 has showcased one clear trend in Bitcoin trading prices, bullish move at the start of every month. No matter whether the underlying reasons are fundamental or purely technical, this move has been observed at the start of every month in the later part of the year. For over 6 months Bitcoin has traded consistently over $500. But this year’s high (till date) was marked at the start of December and the reasons around it are pretty interesting. The Indian currency demonetization has been a steady factor to take the market out of choppiness. But we believe the final push came from Russian adoption of Bitcoin that has circulated quickly among market players. Let’s look into the details of how Bitcoin has fared in Russia:
The Love Hate relationship:
Russian Rubble’s trading against Bitcoin has seen prolific volumes in the past giving hope to better adoption in the country. Russia has struggled since the fall of the Soviet Union to build confidence in the ruble. This is majorly to curb the once-common practice of Russians demanding payment in U.S. dollars and other foreign currencies. The cryptocurrency supporters were happy in 2014 when Russia announced about regulating Bitcoin. But later the Finance Ministry went on to ban Bitcoin much to the disappointment of the supporters. Though they have not imposed the legislation strictly, the local Bitcoin market was significantly affected.
National Cryptocurrency and Blockchain Network:
Although Russia has stayed away from Bitcoin, it is considering the possibility of introducing a national regulated cryptocurrency. Though it would be a cryptocurrency, Russians are planning to make it a bit centralized as against bitcoin. A Russian regulated cryptocurrency should not be a non-emission currency but it will have its issuer with rights and responsibilities. Also, an anti-trust agency within the Russian government is testing a blockchain-based document management system. Named as “Digital Ecosystem” the project involves creating a completely digitalized document ecosystem. The project aims at developing tools that can increase the speed, reliability and quality of interaction during document exchange.
A document by the federal tax authority in Russia has revealed its first official stance on the legal status of cryptocurrencies which turned out to be positive. A summary of the document was shared by Artem Tolkachev, director at Deloitte for legal services for technology and head of the Russian Blockchain Community. It outlines that bitcoin doesn’t necessarily fall under any jurisdiction. It is so often deemed a ‘money-surrogate’ by Russian officials calling for its ban. But there are no specific laws for surrogate money and predictably, a cryptocurrency hence tendering its status to legality. While this is being considered as a loophole, no mention of any cryptocurrency ban in the latest official document can certainly been taken as a positive indication.