The amendment is the latest one among many with the much-publicized bill that was seeking to ban all cryptocurrencies and enforce criminal charges to bitcoiners and those who adopted or mined the cryptocurrency. Indeed, one of the earlier versions of the bill saw the Russian Finance Ministry seek up to a 7-year prison term for bitcoin adopters.
Blockchain’s Potential Helps Bitcoin
The latest amendment is certain to help ease regulatory oversight on bitcoin and cryptocurrencies in Russia. The financial regulatory authority is changing its stance because of how blockchain and bitcoin and interwoven, with the decision coming at a time when Russian authorities – like the country’s central bank – are actively engaging in blockchain development.
While blockchain gains favor, it is unreasonable to criminalize bitcoin adoption, according to Moiseev. He sees distributed ledgers as a “data storage” solution.
“We want to develop blockchain technology, which is based on bitcoin,” he stated. “It is needed for data storage. For example, we have now concluded an experiment based on blockchain technology for the storage of securities information.”
He added:
But blockchain technology works [in a way that] Bitcoin appears as a byproduct. It is therefore clear that we need to exclude operators from the liability of emitting bitcoins, so that they do not face the risk of being prosecuted.
Bitcoin Usage Will Still Be Outlawed in Russia
The Russian Finance Ministry remains steadfast in its belief that the ruble will remain the sole monetary currency of the Russian Federation. In no uncertain terms, Article 75 of the Constitution of the Russian Federation reads:
The monetary unit of the Russian Federation is the ruble. The Central Bank of the Russian Federation is the sole issuer of currency. The introduction and issuance of other currencies in the Russian Federation are prohibited.
Citing the Constitution, Moiseev stated:
Under the Constitution, the only currency in the country is the ruble. Its sole issuer is the Bank of Russia. Thus, the issuance of any other currency, will be illegal.
Bitcoin to See Status Similar to Foreign Currencies
As the result of the prohibitory constitutional article, the relaxed regulation on bitcoin will only extend to its sale and purchase and not its usage in Russia. Much like any foreign currency. Moiseev stated:
Its [foreign currency’s] usage is restricted because it is impossible to issue foreign currency in Russia. But, you can buy it, put it on your pocket and go abroad.
Can Russians, for example, use a plastic card with Bitcoin and use them in a country where their use is permitted? Why not? As a result, the bill is now being refined with the specific wording that allows the purchase of cryptocurrencies to be used outside Russia, as well as selling bitcoin abroad for profit.
The earlier guidelines that proposed a 7-year prison sentence along with relevant fines received criticism from prominent figures and authorities within Russia. For instance, the Chairman of Russia’s largest bank, Sberbank, disagreed with the ban bill. The bill itself was delayed multiple times due to criticism. Notably, the Ministry of Justice in Russia has also voiced its disagreement with the proposed ban bill.