Russia Opens the Door to Cryptocurrencies

[alyssa85]

https://geopoliticalfutures.com/russia-opens-door-cryptocurrencies/

Russia has announced that it will legalize the use of cryptocurrencies. Official reports from the State Duma and the Finance and Economic Development ministries confirmed last week that a bill is being drafted to create the legal framework for trading in bitcoin, dash, ether and other digital currencies. This comes just a year after the same Russian institutions said that people trading in these currencies could be jailed. This raises two important questions: Why has the government made this U-turn, and what opportunities does it now see in this technology? The answers lie in Russia’s need to address serious problems in the banking sector and their impact on the economy.

The Russian economy has been under severe strain since 2014, when oil prices dropped and the United States and European Union imposed sanctions that have dried up foreign investment. As the costs of accessing money increased, the banking sector was also affected by the downturn. Against this backdrop, the Russian Central Bank has intensified its anti-corruption campaign meant to address dodgy, inefficient banks, some of which use money-laundering schemes to remove capital from the country. About 100 banks have closed in the last three years. Central bank head Elvira Nabiullina said the campaign would continue for at least two more years.

But closing banks is expensive – the process has so far cost the Deposit Insurance Agency (DIA) about $50 billion. In addition, the central bank needs to act carefully to avoid a liquidity crisis caused by closing banks. Local companies depend on banks for liquidity. Extended cash shortages in the country’s mono-industrial regions (many of these regions exist in Russia) could fuel social unrest, which the central government wants to avoid.

Moscow hopes to address some of its banking sector woes with new technology.

[talkbitcoin]

so finally the Russian Finance Ministry gave up on their nonsense about wanting to ban bitcoin and threatening jail time!
it is funny how all this time one of the biggest bitcoin conferences about bitcoin and blockchain was held in Moscow.

At the same time, Russia, one of the strongest opponents of bitcoin is seeking to regulate the digital currency. Russian Deputy Finance Minister Alexey Moiseev told Bloomberg in an interview this week that the authorities hope to recognize bitcoin and other cryptocurrencies as a legal financial instrument in 2018 in a bid to tackle money laundering.

from http://www.cnbc.com/2017/04/12/bitcoin-price-rises-japan-russia-regulation.html

i hope this doesn't lead to restrictive regulatory laws.

[Raja_MBZ]

This was expected to happen... If not today, then tomorrow or after that, each and every part of world will have to accept the truth of bitcoin.

[Pamadar]

after japan now its russia's term to embrace the system, will see more to come in coming days as more investors and businessman will see
the advantage of using bitcoin core, another ath will shine for sure.

[SaShiRaJaVu]

It is good to see more countries accepting bitcoin as a legit currency ,Japan started it and now Russia and with time there will be more countries coming forward and legalizing the use of crypto currencies ,which is the right thing to do rather than suppressing the technology.I wish i could see another rally in the price of bitcoin with these positive news.

[Sundark]

after japan now its russia's term to embrace the system, will see more to come in coming days as more investors and businessman will see
the advantage of using bitcoin core, another ath will shine for sure.

Notice that in Japan AFAIK only bitcoin is fully regulated, I don't know about altcoins. Russia is planning to grab cryptocurrency as evaluate it under one big umbrella term.
I wonder if they will prepare a list of good, supported and bad, potentially harmful, ponzi realated or scam cryptocurrencies?

[Xester]

https://geopoliticalfutures.com/russia-opens-door-cryptocurrencies/

Russia has announced that it will legalize the use of cryptocurrencies. Official reports from the State Duma and the Finance and Economic Development ministries confirmed last week that a bill is being drafted to create the legal framework for trading in bitcoin, dash, ether and other digital currencies. This comes just a year after the same Russian institutions said that people trading in these currencies could be jailed. This raises two important questions: Why has the government made this U-turn, and what opportunities does it now see in this technology? The answers lie in Russia’s need to address serious problems in the banking sector and their impact on the economy.

The Russian economy has been under severe strain since 2014, when oil prices dropped and the United States and European Union imposed sanctions that have dried up foreign investment. As the costs of accessing money increased, the banking sector was also affected by the downturn. Against this backdrop, the Russian Central Bank has intensified its anti-corruption campaign meant to address dodgy, inefficient banks, some of which use money-laundering schemes to remove capital from the country. About 100 banks have closed in the last three years. Central bank head Elvira Nabiullina said the campaign would continue for at least two more years.

But closing banks is expensive – the process has so far cost the Deposit Insurance Agency (DIA) about $50 billion. In addition, the central bank needs to act carefully to avoid a liquidity crisis caused by closing banks. Local companies depend on banks for liquidity. Extended cash shortages in the country’s mono-industrial regions (many of these regions exist in Russia) could fuel social unrest, which the central government wants to avoid.

Moscow hopes to address some of its banking sector woes with new technology.

The biggest question is what caused Russia to have a change of mind. They have been very strict with the use of any cryptocurrency before but they are very open to it at this point of time. This is possibly due to the large business opportunity and the potential market and profit that cryptocurrency will come in to Russia using the digital currencies. They have a good  financial analyst on their side and they have seen the future of cryptocurrencies and they dont want to be left behind.

[unamis76]

This raises two important questions: Why has the government made this U-turn

I can only read this from one perspective, after being hostile and now wanting to "regulate"/embrace cryptocurrencies, Russia has found a way to profit severely with this at the expense of user privacy and ease of use, and will probably impose heavy taxation to anything cryptocurrency related. They can't reverse their stance out of the blue in a few months time, that's basically impossible.

That's why I say on every post of mine here regarding these issues... Careful what you wish for, most people see regulation as something positive, but regulations may cripple Bitcoin adoption severely depending on what's decided.

[Taki]

I thought thay plan to realize this already this spring. I don't know what kind of changings it will bring to us, simple users. I am Russian, but I live abroad now. I expect they will obligate all users to pay taxes to the government for all their crypto earnings.

[davis196]

This was expected to happen... If not today, then tomorrow or after that, each and every part of world will have to accept the truth of bitcoin.

Bitcoin will be a great tool for the rich russians to export their capitals outside Russia.
It`s good that they don`t accept just bitcoin.They accept all cryptocurrencies.
Maybe they are  searching for a way to tax bitcoin holders.

[iqlimasyadiqa]

It is good to see more countries accepting bitcoin as a legit currency ,Japan started it and now Russia and with time there will be more countries coming forward and legalizing the use of crypto currencies ,which is the right thing to do rather than suppressing the technology.I wish i could see another rally in the price of bitcoin with these positive news.

This can change everything. There will be a major economic change in the world today. We know that russia is one of the big countries, this can make bitcoin price increase very well.

[Gens09]

This is a good opportunities for the russian besides we knowo that there are many conflict that could happened in the between russian government and bitcoin but this is a good news that russia allow a cryptocurrencies in there country maybe there will getting ready for the changes in technologies in the world and be more advance in this was of having a digital currency.This is a great implact to bitcoin if there will be new bitcoin users if 1 country will allow bitcoin.

[alyssa85]

https://geopoliticalfutures.com/russia-opens-door-cryptocurrencies/

Russia has announced that it will legalize the use of cryptocurrencies. Official reports from the State Duma and the Finance and Economic Development ministries confirmed last week that a bill is being drafted to create the legal framework for trading in bitcoin, dash, ether and other digital currencies. This comes just a year after the same Russian institutions said that people trading in these currencies could be jailed. This raises two important questions: Why has the government made this U-turn, and what opportunities does it now see in this technology? The answers lie in Russia’s need to address serious problems in the banking sector and their impact on the economy.

The Russian economy has been under severe strain since 2014, when oil prices dropped and the United States and European Union imposed sanctions that have dried up foreign investment. As the costs of accessing money increased, the banking sector was also affected by the downturn. Against this backdrop, the Russian Central Bank has intensified its anti-corruption campaign meant to address dodgy, inefficient banks, some of which use money-laundering schemes to remove capital from the country. About 100 banks have closed in the last three years. Central bank head Elvira Nabiullina said the campaign would continue for at least two more years.

But closing banks is expensive – the process has so far cost the Deposit Insurance Agency (DIA) about $50 billion. In addition, the central bank needs to act carefully to avoid a liquidity crisis caused by closing banks. Local companies depend on banks for liquidity. Extended cash shortages in the country’s mono-industrial regions (many of these regions exist in Russia) could fuel social unrest, which the central government wants to avoid.

Moscow hopes to address some of its banking sector woes with new technology.

The biggest question is what caused Russia to have a change of mind. They have been very strict with the use of any cryptocurrency before but they are very open to it at this point of time. This is possibly due to the large business opportunity and the potential market and profit that cryptocurrency will come in to Russia using the digital currencies. They have a good  financial analyst on their side and they have seen the future of cryptocurrencies and they dont want to be left behind.

If you read the article, it says they're having problems with fraud - many of the banks they are closing are bankrupt because someone ran off with the money and they can't trace it.

They believe that bitcoin will help them track people if they start to put banking onto a blockchain - also, they probably hope to track fraudsters who send money to exchanges to be traded, which is why they are legalising the trading. In part it's because they have decided that banning it is silly - but they have also decided it might be a nice honey pot to catch people.

[Juggy777]

This raises two important questions: Why has the government made this U-turn

I can only read this from one perspective, after being hostile and now wanting to "regulate"/embrace cryptocurrencies, Russia has found a way to profit severely with this at the expense of user privacy and ease of use, and will probably impose heavy taxation to anything cryptocurrency related. They can't reverse their stance out of the blue in a few months time, that's basically impossible.

That's why I say on every post of mine here regarding these issues... Careful what you wish for, most people see regulation as something positive, but regulations may cripple Bitcoin adoption severely depending on what's decided.

Something is fishy out here and doesn't feel right at all. From what I interpret it is Russian government will at one hand allow you to use crypto currencies but only the one through the government exchange, basically controlling prices and charging taxes. Those who comply won't be investigated, but those found doing otherwise will be investigated and harassed. Basically they are applying Carrot and stick approach, luring people with Bitcoins and hitting them with taxes. Not a good news for Russian people who use Bitcoins.

[alyssa85]

This raises two important questions: Why has the government made this U-turn

I can only read this from one perspective, after being hostile and now wanting to "regulate"/embrace cryptocurrencies, Russia has found a way to profit severely with this at the expense of user privacy and ease of use, and will probably impose heavy taxation to anything cryptocurrency related. They can't reverse their stance out of the blue in a few months time, that's basically impossible.

That's why I say on every post of mine here regarding these issues... Careful what you wish for, most people see regulation as something positive, but regulations may cripple Bitcoin adoption severely depending on what's decided.

Something is fishy out here and doesn't feel right at all. From what I interpret it is Russian government will at one hand allow you to use crypto currencies but only the one through the government exchange, basically controlling prices and charging taxes. Those who comply won't be investigated, but those found doing otherwise will be investigated and harassed. Basically they are applying Carrot and stick approach, luring people with Bitcoins and hitting them with taxes. Not a good news for Russian people who use Bitcoins.

Everyone has to pay taxes, and Russians are no exemption. States that fail to collect adequate taxes tend to collapse.

[Leonard2016]

i don't think we can call this exactly a "U-Turn" because there has always been talk and only talk not actions about bitcoin. and that is what all the countries doing. and it is understandable too. you need to be worried about illegl activities being done with bitcoin just like you need to be worried about illegal activities being done with fiat. but that doesn't mean extreme actions in either case.

[ahmedjamal1998]

I think I read somewhere that they were trying to ban or make it illegal or something similar.

This is much more satisfying news. First Japan and hopefully more and more countries will start to realize bitcoins as an accepted currency.
But it's not cool that you have to deal through the government or whatever they are trying to apply as that would just break and ruin the nature of "freedom" of bitcoins.

[unamis76]

Something is fishy out here and doesn't feel right at all. From what I interpret it is Russian government will at one hand allow you to use crypto currencies but only the one through the government exchange, basically controlling prices and charging taxes. Those who comply won't be investigated, but those found doing otherwise will be investigated and harassed. Basically they are applying Carrot and stick approach, luring people with Bitcoins and hitting them with taxes. Not a good news for Russian people who use Bitcoins.

I wouldn't be surprised if this was their MO. It would be devastating for cryptocurrencies there and would probably make way for other countries to adopt such measures. There goes "regulations are good for Bitcoin's future"

Everyone has to pay taxes, and Russians are no exemption. States that fail to collect adequate taxes tend to collapse.

Correct, but would you like to pay taxes for everything and anything? By the looks of it, as countries collect further debt due to the crippled fiat system and the people who run it, it only seems that someday even breathing and dreaming will be taxed

Would you like if everything you do Bitcoin related was heavily taxed (or taxed at all)? I'd very much prefer heavier taxing on government services, or restaurants, for example (and that has enough taxes on many countries already).

(Meanwhile governments keep using tax money to invest in their pocket's growth or in new cars to transport themselves... But those are issues for other sections of the forum)

This is much more satisfying news.

We'll see. Here's to hoping that they don't try to subvert what Bitcoin stands for.

[buwaytress]

You can't really open your doors to a guest that doesn't need your invitation to enter (or, for that matter, enters before you're aware!). Seriously though, it's very progressive of countries on both ends of the world (Japan and Russia) to accept Bitcoin - perhaps embracing it is too premature, but the mere act of legalising it could mean increased adoption behind the old Iron Curtain.

[erikalui]

First they threaten people that those who invest in crypto currencies would be fined and jailed and now this article? I don't trust them for their contradicting statements and it doesn't seem they will support bitcoins. They may either impose huge taxes that people automatically give up on cryptos or avoid taxes.