Bitcoin Forum

Russian Lawmaker: Crypto Pay Could ‘Destroy the Financial System’

The chief architect of Russia’s crypto regulations has defended a new Russian law that outlaws payment in bitcoin (BTC) and altcoins – claiming that a failure to do so could have spelled the end for the ruble-powered Russian financial system.
The comments were made by the head of the parliamentary committee on financial markets Anatoly Aksakov, in an interview with the Russian-language edition of state-controlled Russia Today.

Aksakov stated that Moscow had no plans to “legalize digital money as a unit of accountancy,” adding,

[Cryptoassets] can be used as a method of payment for goods elsewhere in the world, but not in Russia. The recognition of digital coins as an official means of payment on a par with the ruble would mean the destruction of the financial system, which ensures the stable operation of the entire economy. Our plans do not yet include the legalization of [cryptoassets] as a payment alternative to the ruble.”

However, Aksakov suggested that Moscow has high hopes for its growing blockchain technology sector. He suggested that the technology could help boost international trade – and even help Russia bypass the burden of international sanctions.

He said,

“Business can now attract investments from foreign partners, as well as sell their goods on blockchain networks. At the same time, the blockchain technology, due to its technical features, makes it possible to bypass sanctions-related restrictions, which helps contribute to the development of trade.”

As previously reported by Cryptonews.com, that although the new law does outlaw crypto payments, it is unlikely to impact the sector much, and amounts to little more than a “glossary of crypto concepts” – with a more comprehensive set of regulations likely to follow in 2021 at the earliest.

Reference: https://cryptonews.com/news/russian-lawmaker-crypto-pay-could-destroy-the-financial-syst-7431.htm

Was actually not surprised that the Russians are back at it again with their anti-crypto stance. They wanted to be as Ruble-centric as possible and do not want foreign or other currencies to be used by their people for better tracking and for stimulating the growth of their own currency. Honestly, crypto-payments amount to only a small percentage of their economy, and I do not see it as a threat on its own against the Ruble. In fact, this might even stimulate the playing ground on Russia and attract services and companies to start their own outlet in the Russian side of things.

I do not understand, if just allowing crypto to be used in some trading cripples all of your economy, I think your economy should cripple anyway, you are very weak and you can't handle even a slight bit of competition.

Crypto is far superior to any fiat in the world but it is not superior enough to actually destroy the financial system as a whole, it is just an alternative and that is it. Until you can put your crypto into bank, have a crypto card, pay everything with crypto and just remove fiat totally out of your life without ever using it again and fiat cash becomes a novelty, I think it can't destroy financial system. And for that to happen we need at least few decades of crypto surge constantly and I feel like that is not going to be stopped this way neither.

I think not just crypto that can be used for illegal things, and money can do so.
We already know that money has been used for illegal things such as money laundering or buying something illegal.
If every government can think that crypto and fiat are like a knife which has two sides, and we have a choice of how we will use for, I think they will understand and will try to prevent that thing.
It will difficult work to know for what reason crypto is used because we can only see the transaction in the blockchain.
Maybe they can still use their fiat, while they can legalize crypto to be used as a commodity at the market and make payments.
Every government needs to dig deeper into this to know the advantages and disadvantages of crypto.

Not just could, but it definitely will. Cryptocurrencies that act like cash will be widely used and that will make all bank transactions obsolete. Banks will do only their primary job, lending and borrowing cryptocurrencies.

Not so sure about that. Why even needed the term destroy? Is it much better for the coined word adopt right? Financial system is not rigged but with the help of cryptocurrencies digital payment could enhanced and widen the ability of financial to be used easily. But the problem is banks dont like the idea cause their clients might focus more on using cryptocurrency instead of their bank system.

If Bitcoin has been legalized as a payment method in Germany in Japan for years and has not destroyed their financial system, then what is this Aksakov talking about? The structure of government in dictatorial-communist countries such as Russia or China is such that it does not want to allow the slightest chance of creating any alternative that would allow people to become financially independent.

When we consider the situation in those countries, should we be surprised that millions are looking for a way out of such countries in legal and illegal ways? Money is one of the very important control factors of any society, it represents the power needed especially for the repressive systems of the police, secret services and the army that suppress any idea of changing the system.

It can be a good point that many countries already legalized the BTC officially and there are some big economy based country also. There economy is running successfully and BTC doesn't hamper their existing economy. So, many countries whom has confused about their economy can follow those countries.

Seriously, and that's true for pretty much every other fiat currency out there.  The simple fact is that people are not turning to bitcoin or any other cryptocurrency in droves and abandoning the fiat system--so this is a bogus argument put forth by the Russian authorities. 

Hopefully other countries won't follow suit and enact laws like this.  It doesn't look like that's going to happen, but you never know.

It's been ten years since bitcoin was created, and the banking system is still doing its thing.  I don't think that system is in danger of being destroyed by a form of money that most people haven't adopted and that most merchants don't accept as payment.

Much of the news concerns Russia, even after the new amendments were approved in the law, which allows the use of cryptocurrencies to buy some products and is not an alternative to the ruble or recognized currency.

Countries (especially Russia, the United States, and China) will not legalize digital currencies because it means weakening the paper money of these countries. Many countries place many restrictions on purchasing gold and force citizens to deposit it in banks.
The same applies to cryptos. They will not obtain legitimacy, but rather taxes are put on them to benefit the national economy.

There is nothing to adopt. Transactions happens on the blockchain you dont need any other bank system to send wealth anymore. They will be obsolete and destroyed.

In my own opinion,Crypto pay could not destroy the financial system because it is just an alternative or additional payment method to be use online if ever the government allow it. Crypto can't replace fiat currency because for sure government doesn't want a decentralized currency that they can't control. But if the government look the crypto currency as the additional method in financial system which is possible,then it will be good and many people will continue to use it more than investment.

This is nothing more but the old “bitcoin bad blockchain good” they are going to use the blockchain to avoid the sanctions against their country and to get even more control of their citizens but if their citizens try to get a little bit more freedom and a great investment opportunity then that is bad for the economy.

Let this be a lesson, governments will always change their rules without notice and they will try to trap you with their lies, never trust them especially when it comes to cryptocurrencies, the only problem is that as long as people keep being sheep and believe everything they say the adoption of bitcoin will still be low, but when the economic system collapses people will finally understand that giving control to a centralized authority of the whole economy is not a good idea.

Crypto payments can destroy the financial system, indeed.
However, in order to be able to make cryptocurrency payments financial system should allow this. Currently, they are not opt to do so. Having said that, if this is going to happen we need to pass a lot of time and let the financial system 'absorb' those payments.

Obviously, cryptocurrency can destroy the financial system in term of control and surveillance. That's why government pushed MLD5/AML regulations. The battle will start soon I think (I read about many services including BitMex now mandatory to do KYC (https://beincrypto.com/bitcoin-exchange-bitmex-to-require-kyc-for-all-its-users/)), It's time to grab the popcorn.

That little competition could turn to a bigger one, once people sees the worthiness of crypto they might just jump all in on that which most of the government does not want to happen. It is understandable how every country has its own government that has a different stance on things, it shows the diversity of how every one of us think. Crypto is small, still, but the potential that lies within is huge.

The problem with crypto is that it separates the citizen to its government in terms of finance monitoring, government would have a hard time tracking illegal movements when we use cryptocurrencies, on the other hand most of us just wanted to have a convenient in transaction which the government clearly sees, but still the threat of using cryptocurrencies is not a joke to for them to just set aside. It cannot destroy the financial system but it can weakens the financial system, hence crypto is always on talks with the possibilities.

If cryptocurrency comes into contact with the real economy, it can disrupt national financial stability in the event of a bubble burst. The movement of money from fiat to cryptocurrency is a form of capital flight for a country and will cause a decline in the value of the national currency.

But if the state is reluctant to adopt financial technology and ignores cryptocurrency it will be detrimental in the long term because algorithmic-based financial technology is a picture of the economy in the industrial revolution, so the sooner a country prepares a legal basis for cryptocurrency, the more accelerating economic development and growth.

Lol well, what did you expect? What will the current Russian government decide to allow cryptocurrencies? I beg you this is not even funny but just wildly naive.
Just remember that any successful IT project in Russia or any successful private business suddenly begins to interest the authorities (because successful and private = dangerous) and all ends up with the assets of companies passing into the right hands. Remember Chichvarkin, or Durov. Read what is happening with Yandex now and what has become with mail.ru.
Yes, the same Slavic Wargaming in their homeland in Belarus had better things-but they also transported almost everything that can be to Cyprus. Do not expect something like this from Russia and then you will not get disappointed.

Specifically the citizens that do crimes. They are the one who are actually worried about this. Well if ever, just in case crypto has been embraced by most. Financial system would widen, but Im kinda thinking how Government could remedy the issue on tax with this. Many financial instituion believe on crypto efficiency and probably will be adopted by many. Why not both just adjust and set aside the money profiting right? This is what Im thinking, countries are too afraid that their economic growth which does not relies on crypto would suffer.

Not right at the 100%. They can coexist and pay with crypto or pay with fiat could be a personal choice. At the moment i don't like to spend my btc, probably only after a pump but in a bear season I will never spend my crypto! Could be as stupid as the guy that spend his btc for 2 pizzas

I personally don't think it's stupid to use cryptocurrencies as a means of payment, BTC was originally intended for just that, but over time it turned into something else. I understand that most are in this game after all for profit, but I like to pay with BTC regardless of its value relative to fiat.

That guy is become legend, despite probably paying for the most expensive pizza in the world - but has shown people that BTC can be used effectively as a payment currency, not just as a store of value. I just feel good when I pay something with BTC because not everyone has the privilege of being their own bank ;)

Well, as long as people from the country are not penalized for using cryptocurrency in the right or moral way. The government can decide not to accept/promote cryptocurrency, but shouldn't stop people from using the good ones, even for "trading".    That'll be dangerous to "freedom to do what is right", I think.

I think governments should be more concerned about making sure citizens & others do what is right/good, and not restricting people's freedom to what is right.
You can't insist that people use something if that thing is bad for them.
 What if cryptocurrency/decentralized tech would help make societies better for everyone? Would it still be avoided?

The government could even have its own decentralized crypto developed and get people from around the world use it, if the currency is good. You can also use existing decentralized cryptocurrencies (& the new ones) in ways that it contribute alot to your economies.

it only becomes stupid if you bought btc for investment and then you willingly spend it when the price dumped hard because you just killed the sense of investing that way but if we started to buy a btc for purchase use or for pay we wont care on its price . i salute you and the pizza guy because you both are two of the few people that uses thier btc for paying or spending .  if not because of the pizzza guy , btc will struggle to gain value .

^ Is Russia in recession at the moment? if, it is maybe they think that Investors would rather choose cryptocurrency. However, they might not consider legalizing crypto payments since Crypto asset has a bigger value than their fiat, and anytime can change a value, doubled or tripled only in a certain amount of time. they hold the power in their fiat "ruble" they can think a way on how to circulate the growth for check and balance Accounting Purposes.
Moreover, Russia is one of the biggest country and Cryptocurrency could be their greatest asset if they think about the positive side.

The legislative initiative of the Russian Federation is proceeding in such a way that it is very difficult to explain it, especially if we take examples of what is happening from other countries, then in Russia everything happens quite the opposite. Today, the Russian government does not intend to legalize cryptocurrency, and the only thing that can happen is a complete ban on cryptocurrency for use by citizens, but the government can fully use cryptocurrency for its own purposes. one of the main whole, not to allow cryptocurrency for citizens of russia, is to control the finances of their citizens, and to prevent the financial independence of people.

Russia's legislators are looking to protect their hard currency, the Ruble. This bill will know the response of the Russian community as of January 1st, 2021, which will come into effect. The law also aims to stimulate businesses to create their own digital assets (stablecoins).

But not as an additional means of payment to the ruble, the law is very limited. Although I think a good path is being created for the Russians
take advantage of technology to solve problems in their financial system.

The question is why? digital payments is not new and cryptocurrency is new to the scene so by this I don't really think it could destroy the financial system since we already have a online payments and other things but still it didn't hurt the system. The crypto pay could make the life easier of the people since they will have so many options regarding on payments especially if they want to transact online.

One of the most important features that Bitcoin has is that anyone in the world can use it to pay for goods and services, no matter what country it is - and that no permission is required for this. The greater the application in everyday life, the more sellers will accept Bitcoin as a means of payment, which actually gives it increasing credibility and an incentive for others to say, "Why wouldn't I offer such a payment option?"

I am happy to have the opportunity to buy practically all electronic goods with BTC in my country, but that there is even a hair salon that accepts cryptocurrencies. I have always been convinced that BTC should be used as a means of payment, but also as a store of value - because if it becomes digital gold that will be traded by speculators, then what will be left for us small users?

Crypto pay can ‘destroy’ the financial system because it does not allow transactions everywhere. That is why many traders are financially disadvantaged. if crypto allows cash payments Crypto Pay Could will improve a lot financially. Many countries around the world do not legalize crypto so traders may be exploited in various ways for it not to be legally effective. I think as the demand for crypto increases, so will the speed of cash transactions.

You should take note that there new law about holding crypto is about that alone only they are also planning to have a different law with regards to mining crypto as well as trading it in an exchange which they have said on a previous statement. This might just mean that they are really planning to have a less crypto friendly law when it comes to the crypto industry country. Even if it is something bad I still think this kind of adjustment from the Russian government to officially allow crypto in the country is a huge improvement and there is still a chance that these laws they will introduce will change overtime.

Obviously people who love the financial system and take advantage of it would say that crypto would destroy it, in reality crypto is not destroying anybody or anyone's money, it is actually making you richer by making sure that wealthy people could not bribe their way into making more money. When a dude has 1 billion and you have 100k, even if government prints out money they give you 600 dollars while giving him 10 million dollars, the more you have the more you get, in bitcoin things do not work that way and that is why wealthy and poor are all the same to blockchain.

This means people who are taking advantage of this current financial system will say that crypto will destroy the way we are right now, well there are so many people poor and starving, maybe the financial system should be destroyed all along?

Bitcoin should be seen as an asset and should not be paid for it will obscure the role and value of fiat money. Not to mention that the volatile bitcoin's exchange rate can be detrimental to both the owner and the buyer.
Every country has a central bank, and the government won't let crypto try to replace fiat money.

The opinion of one guy doesn't mean that all the Russians are anti-crypto or pro-crypto.
However,I assume that most of the politicians and government clerks in Russia share the same opinions.
"Crypto is bad for the economy and financial system of Russia,but it might come handy for avoiding international sanctions".This means that cryptocurrencies will never be fully adopted in Russia,but all the government controlled Russian banks and companies might use cryptocurrencies to trade overseas(which isn't that bad).

I don't think so. The financial system has people behind them, and such people have a lot of power on dictating, manipulating things. Manipulating the average person. Crypto could be 1000x better, but that won't do it any good.

No, crypto may be useful in payments but I am pretty sure it could not destroy the financial system or the banking payment system. Banks had establish already and are way too secure but the disadvantage are those high transaction fees being deducted to every transactions especially if huge money were involve.

However, it is still best to make choices, either to use crypto pay or the financial.system that are establish and secured too.

Cryptocurrency is the best solution as an alternative financial system, so I don't know how crypto could destroy the financial system because it is more secure, fast, and low-cost fee. It also already proves that cryptocurrency doesn't get affected in any economic crisis, especially the Coronavirus crisis, that only stocks and banks have only suffered from it.

I actually see it as simply as expression of opinion and his reasons are valid except we all wanted to shy away from the truth. However, with the challenges around, it brings up the room for improvement and innovations which I believe its something that the country should be harnessing. Its even an insulting things that a country like Russia should be bother about this when they can mandate their world class engineers to find away to protect them and also harness the underlying advantage of the technology.

Some countries are really confused when it comes to cryptocurrency. The next thing they will say that cryptocurrency is good and that they are not against it, before you know what’s happening again they have changed their mind and started saying something else. I just don’t get them , really.

Although right from time I have always had this thought that the government in some countries might be against cryptocurrency, since people will be using it to bypass a lot of things, and even banks in some ways will not be happy about it if they should notice a decrease in what they are getting in some areas, although we have not gotten to that yet. But I do hope that we fix things up.

Well it's a big country with lots of governement officials, there are bound to be different views on this. They will probably go back and forth with this few generations until they give up. Meanwhile bank in Russia backed a loan with an altcoin (https://cryptopotato.com/waves-used-for-the-first-cryptocurrency-backed-bank-loan-in-russia/).

I don't know why Russia are stopping the usage of crypto currencies mainly bitcoin in their country. They might think that these can bypass their taxations and might evade as they can but they didn't know most of those people will just hold those and pay just in small amount. Atleast let some local exchanges to run for them to convert their btcs.

"Crypto pay could destroy the financial system". That's why instead of fixing the financial system we will ban crypto payments => Russian logic

In terms of cryptocurrencies' power and decentralization in a country, they are not giving any control towards the financial aspect. They do not want to give up power on having Bitcoin or any other coin that they have no control over to be legalized.

Even if they say they are open to blockchain technology and it's application towards financial and other branches, they only do not like giving up control with their economic system. They are not taking that risk.

not only in one country but all of them, they all make regulations that are burdensome for crypto whatever it is, at least they have to give a little space if they really want to implement the rules they want, but no they reject it outright and I think crypto will survive.

Of course, crypto-currency will survive no matter what. They can't control/tax if the transaction will go in crypto-currency. Even if they banned it many people will still use it in any other way. What will be there gains to accept crypto-currency right? Or if there's an advantage in accepting, is this worth it to take that risk?

How though? Like I get that he is a person who doesn't want crypto to succeed because he would be destroyed, however I do wonder what the mindset is?

After all even if he lies and he knows he lies, there must be some sort of situation where he tells his own roadmap to how the crypto would destroy the financial system right? Who would get hurt? How would it affect everyday regular people?

Would it be really that bad for the general population? What would cause it? How would it go down? Will it ever recover? Like there should be sooooo many things asked about this to the guy.

I just think that even if it somehow manages to get destroyed or not, I feel like with crypto we will be ahead of people who use fiat no matter what the situation is, destroyed or not.

When I see some countries acting like Bitcoin poses a threat, I just don’t get it because I don’t really see what’s bad about Bitcoin, although I do know that there area few disadvantages, but with events that has taken place we all know that those disadvantages can be tackled. I don’t wish for Bitcoin to replace our current monetary system like some go crazy about it, all I want is that the government allows it as an alternative.

I know that they don’t like the fact that they can’t influence the supply of cryptocurrency or control anything about it, so they are fighting against it. And another disadvantage can be that cryptocurrency can be used ‘pseudonymously’ for illegal activities. But we have seen things happen, like hackers who used Bitcoin, and they were all caught, which means that all those people can be caught.

There is even uncertainty inside nations let alone difference between nations. I mean think about it, there is nations who have crypto companies in it who are working properly and then somehow ban it at the same time, so it is getting really weird so that is why I do understand there is difference between nations as well who ban it and who allow it. Look at Korea for example because they are allowing it and right now we all know that they tax it and so forth which means they are doing very well with it, whereas some other nations made it illegal at the same time.

Crypto will survive itself, at the very worst companies will move to places that is allowed and that is how you could make it work if the crypto is banned in some companies nations and that is how it could work.

If there will be a lot of shops or merchants having crypto as part of their payment method, I don't think users will think of the volatility issue. If it is already in front of them, they will use it for convenience purposes. And owed to this pandemic, I am guessing a lot of merchants are thinking of adding crypto in their payment system to lessen contact from fiat money owed to this virus. But right now, I don't think crypto pay could destroy the financial system, it is too early to have such effect.

For effectiveness issues, I think payments using e-money are more effective because they are more common than cryptocurrencies. It only converts physical form to electronic, with the same nominal value. While we know cryptocurrency adaptation is not yet widespread and only some people are familiar with it. Of course, volatility is a problem that is quite disturbing for me if I have to use cryptocurrency as a means of payment, it depends on each perspective, because for me cryptocurrency, especially bitcoin, is more effective as an investment tool. except, payment using stablecoins, it looks like this can be a little considered :)

This is what majority been thinking if they should really be using up their coins on making up transactions if they can possibly do it via fiat without any hassle and problems.
E-payments had already existed for a long time now and been offered by most banks or institutions which i cant deny that most convenient way when it comes on transacting up thing.
Im not against with crypto but we should accept that it cant really replace fiat system anytime soon neither physical or online ones.So i dont really see the threat on where
its being tackled on here.It would rather be good to be an option.

If the adoption is fast and supported by Government it will destroy the current financial system completely but the digital payment is still at the infant stage.

We can order foods in online store already.
We can buy some products in online stores already.
We can pay bills using cryptocurrency wallet.
We can pay our loans through E-payment.

There is a convenient way that E-payment is giving to us already. We should accept the fact that we need it right now. Specially that there is a pandemic and only one thing we can do, that is to stay in our house. Therefore, I think there is still the possibility that crypto will replace the fiat system soon. As we all know that dollars is gradually decreasing its value. Anytime soon, it may cause an inflation.

I agree on this. Money laundering and other related illegal activities are always put into blame on cryptocurrencies knowing that more malicious and hideous activities are being done with the use of fiat currency. Both fiat and crypto have their own advantages and disadvantages depending upon the usage of a certain individual. Such activities must not put to a blame in any kind of currency for people are responsible for doing such acts and not crypto or fiat as a whole.

Regulations on using cryptocurrencies must be put into discussion knowing both sides of the pros and cons of it to be able to settle or set up a solution to resolve the hanging problem with regards to its usage. If that would just be the issue why Russia is still not allowing the usage of cryptocurrencies for payments, then they must settle regulations that will inhibit the usage of both crypto and fiat in a free space which will still assure that their national currency will not be taken for granted because of the existence of cryptocurrencies on hand. The government must gain more knowledge about cryptocurrencies and better do understand the importance of its existence as a payment option in their country.