Russian president Vladimir Putin is a bitcoin skeptic who wants cryptocurrency regulations in place “by July 1," according to the official government publication Parlamentskaya Gazeta.
The regulations are part of the Digital Assets Regulation Bill, which is expected to set guidelines for cryptocurrency use in Russia.
Separately, the Russian Ministry of Finance plans to introduce a law that will criminalize the use of cryptocurrencies as money substitutes.
Elvira Nabiullina, head of the Bank of Russia, said she and the Russian Finance Ministry oppose the use of virtual currencies "as private money and money surrogates,” saying only the ruble can be used to pay for goods and services, Bitcoin.com reported. "There is the ruble, and everything else is a surrogate," she said.
Nabiullina said the move to criminalize the use of bitcoin and other digital currencies as money substitutes is to protect the Russian ruble. "This is necessary to protect the ruble as the single legal [means of] payment in Russia," she said.
Central Bank Head: Rubles Rule, Cryptos Drool
Authorities have not stated what the penalties are for breaking this law, but the guidelines are forthcoming.
“The consequences of the violation of this principle have not been reflected anywhere for many years. The Finance Ministry decided to fill this gap," Alexei Moiseev, Russia's deputy finance minister (pictured).
In January 2018, Russia moved to legalize cryptocurrency trading on official trading platforms, saying regulations are needed to protect individuals from getting swindled in the opaque, unregulated Crypto Wild West.
“If we regulate, but not efficiently enough, then the government will be responsible for the difficult situations that people can get into,” President Putin said. “Right now it is the responsibility of the person himself, and the government can only say, ‘you can do this but you can’t do that.' And if it’s still not clear, then there will be some problems that need to be solved."
Russia May Launch Its Own Cryptocurrency
Putin previously said he's leery of bitcoin because cryptocurrencies are not backed by a central bank.
In early October 2017, Putin said crypto can easily be exploited for money-laundering and other illegal activities. He even called virtual currencies a "pyramid scheme." (See also: What is a Pyramid Scheme?)
A week later, Putin abruptly flip-flopped, and announced that Russia plans to launch its own cryptocurrency called the CryptoRuble in a bid to circumvent U.S. economic sanctions.
Meanwhile, in the United States, bitcoin prices plunged almost 9% today after the SEC announced that it will require cryptocurrency exchanges to register with the agency. (See more: Bitcoin Price Tumbles as SEC Says Crypto Exchanges Must Register.) This is a sign that there is more – not less – regulatory scrutiny coming, both in the U.S. and around the world.
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